Born in New York in 1732, Rachel Judah was the daughter of London-born Sarah Helbert Judah and Baruch Judah of Breslau, who had immigrated in 1715. Rachel was one of at least eight siblings, brought up in the community around Congregation Shearith Israel, to which her father was an elector.

In 1759 she married Manuel Josephson, a merchant likewise deeply involved with the synagogue. They made their life in New York until the British occupation of the city in 1776, when they—like many—fled to Philadelphia. There they became involved with Congregation Mikveh Israel. The couple, who had no children, remained in Philadelphian after the war ended and for the rest of their lives.