Cary was born on October 29, 1918, in San Diego, California, as Peggy-Jean Montgomery, the second daughter of Marian (née Baxter) and Jack Montgomery. While some sources incorrectly give her birth name as Margaret, Cary herself, in her autobiography, notes that she was indeed born as Peggy-Jean. She further explains that although the Roman Catholic nuns at her birth hospital recommended the name Margaret, her parents rejected the suggestion. Her elder sister, called Louise or, occasionally, Jackie, was legally named Jack-Louise.
Between 1921-24, Peggy made close to 150 short comedy films for Century. Her movies often spoofed full-length motion pictures, social issues and stars of the era; in one, Peg O' the Movies, she satirized both Rudolph Valentino and Pola Negri. She also appeared in film adaptations of novels and fairy tales, such as Hansel and Gretel and Jack and the Beanstalk, contemporary comedies, and a few full-length motion pictures.
While under contract with Century and Universal, Peggy commanded an impressive salary. By 1923 she was signed to a $1.5 million a year contract at Universal (equivalent to $20.6 million in 2014 dollars); on her vaudeville tours she made $300 per day. Her parents handled all of the finances; money was spent on expensive cars, homes, and clothing.
The success of the Baby Peggy films brought her into prominence. When she was not filming, she embarked on extensive "In-Person" personal appearance tours across the country to promote her movies. She was also featured in several short skits on major stages in Los Angeles and New York, including Grauman's Million Dollar Theatre and the Hippodrome. Her likeness appeared on magazine covers and was used in advertisements for various businesses and charitable campaigns. She was also named the Official Mascot of the 1924 Democratic Convention in New York, and stood onstage waving a United States flag next to Franklin Delano Roosevelt.
From 1925 to 1929, Peggy had a successful career as a vaudeville performer. Although her routine, which included a comedy Sketch, singing and a dramatic monologue, was initially met with skepticism, it soon became a popular and respected act. Although she was prohibited from "playing the Palace" because of her young age, she appeared onstage there as a special guest. Peggy and her family toured the United States and Canada, performing in major venues, until the family tired of touring.
The vast majority of Cary's Baby Peggy films have not survived and records related to their production have been lost. Century Studios burned down in 1926. In addition, another older Actress named Peggy Montgomery was active in Hollywood Western films between 1924–29; her credits are occasionally confused with those of Baby Peggy. Filmographies at major websites are incomplete, and sometimes incorrect, because of these facts.
Peggy's father planned to buy a ranch and convert it into a high-end getaway. However, the stock market crash of 1929 put an immediate halt to the plans. Having made a $75,000 deposit on the land and existing property, the Montgomerys were forced to move to rural Wyoming where they lived near the Jelm Mountains. Peggy found the change in pace refreshing and hoped her stage days were over. However, the family struggled to make a living, and as a last-ditch effort returned to Hollywood in the early 1930s, much to the teen-aged Peggy's chagrin.
At the age of seventeen, trying to escape the film industry and her parents' plans for her life, Cary ran away from home and rented an apartment with her sister Louise. She married actor Gordon Ayres, whom she met on the set of Ah, Wilderness!, in 1938. They divorced in 1948.
In 1954, she married Artist Robert "Bob" Cary (sometimes listed as Bob Carey). They had one son, Mark. They remained married until Bob Cary's death in 2001.
On November 8, 2008, ten days after her 90th birthday, Cary was honored at the Edison Theatre in Niles, California, with a screening of two of her feature films, Helen's Babies and Captain January.
In 2012, a campaign to get Cary a star on the Hollywood Walk of Fame was initiated on crowd-funding site Indiegogo. On December 3, 2012, Turner Classic Movies presented the 2011 documentary Baby Peggy: The Elephant in the Room.
In 2016, it was announced that her lost film Our Pet was found in Japan.
Baby Peggy’s career was controlled by her father, who accompanied her to the studio every day and made every decision about her contracts. Mr. Montgomery often claimed that Peggy's success was based not on her own talent, but on her ability to follow orders unquestioningly.
