Rachel was born and raised in Augusta, Maine. She attended Cony High School, where she competed in the high jump. As a sophomore at Cony, she studied abroad in France. Upon graduating in 1998, she headed to Columbia University in New York City, intent on studying psychology.

According to Nichols, she stumbled into modeling accidentally: “I was in the right place at the right time and decided to give modeling a try.” While posing for companies like Guess? and Abercrombie & Fitch, she also enrolled in drama classes at Columbia. She maintained a difficult schedule throughout college, balancing her studies in New York City with photo shoots in Europe. In 2002, Nichols decided to really pursue acting in earnest.