Skarsten was born in Toronto, to a Canadian mother, Mary Aileen (née Self), and a Norwegian father, Dr. Stan Skarsten. She has a younger brother. Rachel trained with the Royal Academy of Dance for 12 years and attended Claude Watson School for the Arts from grades 4 to 8. There she majored in visual arts and the cello. She continued in the Claude Watson Arts Program at Earl Haig Secondary School from grades 9-12, majoring in visual arts.
After being discovered by an agent at a memorial for her father, she went on to be cast as a regular in shows such as Little Men before landing her "big break" as a lead in the Warner Brothers television series Birds of Prey.
After filming wrapped, Skarsten left Los Angeles and returned to Canada where she completed a double degree in English Literature and Classical Studies at the prestigious Queen's University in Kingston, Ontario. Following this, she returned to acting with arcs on The LA Complex, Flashpoint, and The Listener as well as work in Canadian independents such as Servitude and Two Hands to Mouth. She played Andrea in the movie adaptation of Fifty Shades of Grey.