Rita Panahi was born in Pine Bluff, Arkansas, United States, the child of Iranian parents. Her mother was a midwife, and her father was an agricultural engineer. The family returned to Iran during her infancy, living on the coast and moving to Tehran by 1979. Her mother worked for a hospital associated with the Shah at the time of the Iranian Revolution. Panahi described her parents as “relaxed Muslims who were not particularly political.”

Rita’s Muslim family was targeted by the repressive Islamic regime; however, in 1984 they were accepted by Australia as refugees and lived in Melbourne. Rita, who only knew two words of English, went to a local primary school at the age of 8. She attended Monash University but did not complete her Bachelor of Business Finance. She worked in banking and became the youngest branch manager in the history of Colonial Mutual. When she was in her 30s, feeling her lack of tertiary qualifications was unfinished business, she enrolled in and completed a Master of Business Administration from Swinburne University.

Panahi initially wrote for the daily free commuter newspaper mX, writing a weekly sports gossip column. Her column was picked up for a second year and by 2007 she was a regular guest on the AM sports radio station SEN. She joined the Herald and Weekly Times, a subsidiary of News Corp Australia, in September 2007. She began hosting The Friday Show on Sky News Live in March 2018.

She is currently host of The Rita Panahi Show and Lefties Losing It on Sky News Australia, and a contributor to Sunrise on the Seven Network. As of September 2025, Lefties Losing It was rated as the 24th most popular podcast on YouTube in the United States. Panahi has a child with an undisclosed father and is a single parent.