Sibylle Pietzsch was born in Dresden on October 29, 1903 to architect Martin Pietzsch (Deutscher Werkbund) and Fanny Clauss Pietzsch.
After working at a variety of jobs (including clerical work for Leo Frobenius in 1923), she became an actress, performing on stage and in a couple of films. While performing she went under the stage name Sibyl Peech.  She later moved to Berlin and became a scriptwriter. In 1931 she met the former Bauhaus professor, artist, and photographer László Moholy-Nagy (1895–1946) who was trying to get support for his most famous film, A Lightplay black white gray. They were married in 1935. They had two daughters, Hattula (born 1933), and Claudia (1936–1971).
Due to the rise of Nazism László Moholy-Nagy worked for a year in Amsterdam in 1934, while Sibyl and Hattula remained in Berlin. The family reunited in London in 1935.
In 1937, the family emigrated to the United States, settling in Chicago. Here, Moholy-Nagy assisted her husband in opening the New Bauhaus in October, 1937, which was sponsored by the Association of Arts and Industries. After the New Bauhaus closed in June, 1938, Moholy-Nagy helped her husband open his own school, the School of Design in Chicago in February 1939. In 1944 this school was reorganized and renamed the Institute of Design. In 1956 the Institute of Design became a department of the Illinois Institute of Technology, IIT Institute of Design. . Moreover, she assisted him by copy editing his book Vision in Motion (1947).
After her husband's death in November, 1946, Moholy-Nagy decided to become an architectural historian and teacher building on her knowledge from her father, and from her friendships with Walter Gropius and Sigfried Giedion, which whom she knew through her husband. In 1951, after holding teaching positions in Chicago, Peoria, San Francisco, and Berkeley, she was hired as associate professor of architecture history at Pratt Institute in New York City. She taught courses on such subjects as urban history and design. She retired from being a full professor in 1969, and became a visiting professor at Columbia University until her death.
Throughout the 1950s and 1960s, Moholy-Nagy had a career as an architecture critic, maintaining professional relationships with such figures, including Philip Johnson, and Carlos Raul Villanueva. Maholy-Nagy was also an accomplished author. She published a novel, Children's Children, in 1945. In 1950 she wrote a memoir of her husband, Moholy-Nagy: Experiment in Totality. In 1952, the Architectural League of New York awarded her an Arnold Brunner research grant, in order to study vernacular architecture, and subsequently produced Native Genius in Anonymous Architecture (1957), one of the first books on vernacular design for architects, filled with precedents highlighting sustainable features. One of her most important books, Matrix of Man: An Illustrated History of Urban Environment, appeared in 1968. She also made numerous contributions to architecture magazines, such as Architectural Forum and Progressive Architecture. She was also one of the first critics to study post-War Latin American architecture in-depth.
She died in New York City on January 8, 1971.