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Hayden was born and raised in Palisades, Rockland County, New York, the daughter of Lesley R. Vogel, a former soap opera actress, and Alan L. "Skip" Panettiere, a fire department lieutenant. She has one younger brother, fellow actor Jansen Panettiere.
Hayden attended South Orangetown Middle School in New York but, following seventh grade, finished her high school education via homeschooling and has postponed higher education in favor of an acting career, although she has expressed an interest in "continuing to learn."

Hayden began modeling at the age of four months. She then began appearing in commercials at 11 months, first appearing in an advertisement for Playskool. She landed a role as Sarah Roberts on the ABC soap opera One Life to Live (1994-1997) and later as Lizzie Spaulding on the CBS soap opera Guiding Light (1996-2000). While on Guiding Light, Hayden's character Lizzie battled leukemia, for which the show received a Special Recognition Award from the Leukemia and Lymphoma Society for bringing national awareness of the disease to the attention of daytime viewers. Hayden appears as Claire Bennet in the NBC series Heroes as a high school cheerleader with regenerative healing powers. Due to her role on Heroes, she became a regular on the science fiction convention circuit, invited to attend conventions around the world in 2007, including GenCon, New York Comic-Con and Fan Expo Canada. In regard to the roles she has played, Hayden admitted that options are sometimes limited because "people look at [her] as either the 'popular cheerleader' type or just 'the blonde'." She has appeared in over a dozen full-length feature films, several made-for-TV movies and provided the voice for Dot in A Bug's Life. She played the role of Coach Yoast's daughter, Sheryl, in the 2000 Disney film Remember The Titans. In addition, she voiced Kairi in the Kingdom Hearts series of video games for the PlayStation 2. Panettiere appeared on FOX's Ally McBeal as Ally McBeal's daughter, and had a recurring guest role on Malcolm in the Middle and guest starred in Law & Order: SVU. She starred in Bring It On: All or Nothing as a cheerleader and had a supporting role as Adelaide Bourbon in the recently released independent film Shanghai Kiss. She appeared in the Disney Channel film Tiger Cruise, playing the main role of a Navy brat and in Raising Helen, as the adolescent niece. She appeared in the drama film Fireflies in the Garden as a younger version of Emily Watson's character, Jane Lawrence. In June 2007, she signed with the William Morris Agency, after previously being represented by United Talent Agency.