Pfau was born on 9 September 1929 in Leipzig, Germany, to Lutheran Protestant parents. She had four sisters and one brother. Her home was destroyed by bombing during World War II. Following the post-war Soviet occupation of East Germany she escaped to West Germany along with her family, and chose medicine as her future career. During the 1950s, she studied medicine at the University of Mainz. During this time, Pfau met several times with a Dutch Christian woman, who was a concentration camp survivor and currently dedicated her life to "preaching love and forgiveness". After "her life-changing experience", Pfau left "a romantic association" with a fellow student, got involved in discussions in the Mainz's philosophy and classical literature department. After completing her clinical examination, Pfau moved to Marburg to carry on her clinical studies. Then she was baptized as an Evangelical Protestant in 1951, before her conversion to Roman Catholicism in 1953. Pfau admitted that she learned the "courage of being human" from Saint Thomas Aquinas through Josef Pieper's writing. There she joined a Catholic parish, and she was greatly influenced by Romano Guardini's The Lord in this period.
In 1957, she travelled to Paris and joined the Daughters of the Heart of Mary, a Catholic order. She said, "When you receive such a calling, you cannot turn it down, for it is not you who has made the choice. ... God has chosen you for himself." The order later sent her to southern India; however, in 1960, a visa issue meant she became stuck in Karachi. She travelled to various parts of Pakistan and across the border to Afghanistan to rescue patients who were abandoned by their families or locked in small rooms for a lifetime.