Margaret was born into the House of Dampierre, the eldest daughter of Archambaud VIII, Lord of Bourbon. Her mother was her father's first wife, Alice of Forez, daughter of Guigues III, Count of Forez. Archambaud was the constable of Count Theobald IV of Champagne. Margaret was 15 years old when, on 12 September 1232, she became the third wife of the 32-year-old recently widowed Count Theobald. His first wife, Gertrude of Dagsburg, had been repudiated and already deceased, while the second, Agnes of Beaujeu, died leaving only a daughter, Blanche. Their marriage was one of only two unions of the counts of Champagne with a significant age disparity between spouses, the other one being the marriage of Henry I of Champagne and Marie of France. Margaret brought a large dowry, but an unusual clause in her marriage contract stipulated that only a prorated part of it would be returned to her father in case of her death without issue within the first nine years of the marriage and nothing if she died after nine years had passed. Only if the union ended in annulment, as her parents' and Theobald's first marriage had, was the entire sum to be returned.
Regency
Margaret's marriage lasted twenty years, during which she delivered seven children. In 1234, she became Queen of Navarre when Theobald inherited the kingdom from his maternal uncle, Sancho VII. Little is known about Margaret's life as queen consort, which appears to have been spent in relative obscurity. Her husband's death in 1253, however, brought her to spotlight: their son, Theobald II of Navarre, was 18, while the laws of the realm required the king to be 21 to take control of his inheritance. She immediately had to deal with a succession crisis in the kingdom. Although her husband, also Count of Champagne, had resided in Navarre much of the time after his accession to the royal throne, the nobility of the kingdom were unwilling to accept his son as their king. Margaret prevented the outbreak of an open rebellion by travelling with Theobald to the capital, Pamplona, and by allying with the neighbouring Kingdom of Aragon. She also inherited her husband's long-standing dispute with the Knights Templar, who had been buying lots of feudal property in Champagne despite his disapproval. Margaret resolutely prohibited them from acquiring any more land within the county. In 1254, Margaret was persuaded by her son to arrange a marriage for him with Isabella, daughter of King Louis IX of France. King Theobald II reached the age of majority in 1256. No longer regent, Queen Margaret retired to her large dower lands, consisting of seven castellanies, where she spent the rest of her life. She died in Provins and was buried at the Saint-Joseph de Clairval abbey in Flavigny-sur-Ozerain.