Danielle Nicole Panabaker was born in Augusta, Georgia, and her younger sister, actress Kay Panabaker, gained recognition for her role in the TV series Summerland, which aired from 2004 to 2005.
At the age of 10, Panabaker began her acting career at a summer camp, and soon joined community theater productions. She later moved to Naperville, Illinois, where she became a member of the Neuqua Valley High School speech team.
Panabaker's initial appearances in commercials led to her landing roles in television shows, including The Guardian, Malcolm in the Middle, Law & Order: Special Victims Unit, Medium, Summerland, and Stuck in the Suburbs. She also appeared in the Lifetime Television productions Sex & the Single Mom and Mom at Sixteen, as well as the well-reviewed miniseries Empire Falls.
Panabaker considers Empire Falls to be her big break, as it gave her the confidence to pursue her career. She has also appeared in stage productions, including musical theater, such as West Side Story, Pippin, Once Upon a Time, and Beauty Lou and the Country Beast.
In 2004, Panabaker starred in the ABC film Searching for David's Heart alongside former co-Disney star Raviv Ullman. In 2005, she co-starred in two widely-released theatrical films, Sky High and Yours, Mine & Ours.
Her next role was in the film Home of the Giants, opposite Ryan Merriman and Haley Joel Osment. She also had a supporting role in the film Mr. Brooks, opposite Kevin Costner. In the Disney Channel original movie Read It and Weep, she plays Is, an alternate version of Jamie, who was played by her real-life sister, Kay Panabaker.