Margaret was born at Farleigh Hungerford Castle in Somerset, the only surviving daughter of George Plantagenet, 1st Duke of Clarence, and his wife Isabel Neville, who was the elder daughter of Richard Neville, 16th Earl of Warwick, and his wife Anne de Beauchamp, 16th Countess of Warwick. Her maternal grandfather was killed fighting against her uncle, Edward IV, at the Battle of Barnet. Her father, already Duke of Clarence, was then created Earl of Salisbury and of Warwick. Edward IV declared that Margaret's younger brother Edward should be known as Earl of Warwick as a courtesy title, but no peerage was ever created for him. Margaret would have had a claim to the Earldom of Warwick, but the earldom was forfeited on the attainder of her brother Edward.