Born in Washington, D.C. as Anna Katherine Johnston, she earned a Bachelor of Arts degree from Barnard College in 1954.

[citation needed] In 2006, Taylor was the first federal judge to rule on the legal and constitutional issues of the NSA warrantless surveillance controversy.

Her ruling in ACLU v. NSA held that the domestic wiretapping conducted by the National Security Agency without court approval violates the Foreign Intelligence Surveillance Act and is unconstitutional.

[5] The conservative watchdog organization Judicial Watch has alleged that Taylor may have had a conflict of interest in the case, because, according to Judicial Watch, she was secretary and trustee for the Community Foundation for Southeastern Michigan (CFSEM), a group that made a $45,000 grant over two years to the ACLU of Michigan, the plaintiff in ACLU v. NSA in whose favor Taylor ruled.

By a 2–1 vote, the appellate court held that the plaintiffs lacked standing, and vacated the portion of Taylor's ruling concerning warrantless wiretaps.