Daughter of David Spence and Helen Brodie, Spence was educated in Edinburgh and came to Australia with her family in 1839. She became a governess at the age of 17 and was in charge of a school at 20. In 1850 she turned to journalism, publishing articles in Cornhill Magazine, Fortnightly Review and Melbourne Review, and she was a regular paid contributor to the South Australian Register from 1878 to 1893, writing leaders, book reviews and articles. These included a number of articles on electoral reform, which had been a particular concern of hers since reading an article by John Stuart Mill in 1859. She wrote for children as "Aunt Kate" in The Children's Hour and wrote on children's books in the Observer as " One who loves them". She published a number of acrostics, games and acting charades, and contributed to, and possibly edited, two books of acrostics, Silver Wattle (1879) and Olio (1880).
In 1859, with other women from the Unitarian Church, she established a juvenile library which existed for many years and is now housed in the Children's Literature Research Collection at the State Library of South Australia.
Spence visited England in 1865, and on her return to South Australia lived an active life working for the welfare of destitute children as well as being a Unitarian preacher and a publicist for the emancipation of women and for electoral reform. In 1877 she was appointed to the School Board of Advice for the East Torrens area; the first woman to be placed in an official position by the South Australia Government.
She devoted the last two decades of her life to campaigning for electoral reform and proportional representation, both in Australia and in Britain and the United States. Standing for election at the Federal Convention in 1897, albeit unsuccessfully, she was the first woman political candidate in Australia. She was appointed to the Commission of Enquiry into the management and condition of the Adelaide Hospital in 1895; the first woman in Australia to participate in an official Commission. In 1902 she helped found the National Council of Women.