She was the second daughter of Landgrave (later Prince) William I of Hesse by Princess Wilhelmina Caroline of Denmark and Norway, daughter of King Frederick V. Since early childhood, Karoline Amalie was betrothed to her double first-cousin Prince Frederik of Hesse; however, the engagement was dissolved in 1799 after the apparent affair between her and chamberlain Count Ludwig von Taube, who ended when Landgrave William I dismissed him from his service and expelled from court.

The well-known painter Caroline Louise Seidler, who was at the court of Gotha in the winter of 1811 to paint the Ducal family, described Karoline Amalie rather unflattering as "good, benevolent, but not just an excellent lady".

Her summer residence, Schloss Friedrichsthal, was where the Dowager Duchess received the Royal British couple (Queen Victoria and Prince Albert) in August 1845 during their visit to Germany.

The local Privilegirte Gothaische newspaper wrote on the occasion of this visit: "...everyone in Gotha rejoiced of happiness, when the revered noble princess, the widowed Duchess Carolina Amalia received the sublime wife of her beloved grandson, Prince Albert, in her maternal arms".

[4] Albert's brother, Duke Ernest II of Saxe-Coburg and Gotha also remembered his step-grandmother fondly; he quoted: "She had in her long life hardly an enemy and enjoyed until her death [...] a truly rare worship".