She was indicted this week on charges of conspiracy, obstruction of justice, and securities fraud. Stewart has pleaded not guilty to the charges and will face trial, one that is sure to be a media sensation.
Stewart has already lost hundreds of millions of dollars of her personal fortune, as has media giant Martha Stewart Living Omnimedia, from which she resigned this week as chief executive.
She also risks losing an even more valuable asset - the love and loyalty of millions of admiring consumers.
It was all so very different when we first met Martha Stewart seven years ago, and again, when we visited her as a newly minted CEO in the summer of 2000.
At that time, the future was coming up roses. It was a perfect Martha Stewart moment, Morley Safer reports.
Martha Stewart may be the most recognized CEO in the world. She is on television more than 20 times a week and appears on the radio, in her newspaper columns, on her Web site and in her magazine.
When 60 Minutes' Morley Safer first profiled Stewart six years ago, she had a multimillion dollar corporation. Today, that is pocket change to Stewart. But before reading about how she baked her way to billions, find out about her years as a mere millionaire.
Martha Stewart sells that most indefinable and ambiguous of all products: taste.
In books, in the Martha Stewart magazine, on the Martha Stewart television series, she is the American goddess of the kitchen, living room and garden.
But when you peel away all the hype, the perfection in every department, you find a very, very focused person.
She doesn't like frivolous activities: "I can't concentrate on games," she says. "I lose my concentration really fast."
What started in 1976 as a small, home-based catering business has become Martha Stewart Living Enterprises, a multimedia corporation bringing in something like $200 million a year.
At least once a month Stewart goes out to meet the multitudes, where she reminds one and all that in the perfect life, the perfect home, idleness does not exist.
"If you get tired of cooking, you can go outside and grow a plant," she says. "If you get tired of growing a plant, you can go canoeing. If you get tired of canoeing, you can just make a curtain; you can make a bed; you can paint a table - whatever."
Some say there is something almost evangelical about her message. "I don't want to be an evangelist," Stewart says.
"I think of myself more as a pilgrim going out discovering, setting roots, feeding, growing," she says. "The word I'm looking for is 'improve,' [for people] to think about themselves in a better way. You know, there's a lot of lack of self-confidence around. A lot people live their lives and are never fulfilled."
Others criticize her for making people feel that they've failed if they don't achieve her brand of casual, easy perfection. "But they might, and that's what they're all striving for, too," she says. "And they're saying, 'Boy, I wonder if I can make that?' They may not ever make that cake, but they can dream about it."
Martha Stewart Living is one of the fastest-growing magazines in the United States. It has led to a spoof, Is Martha Stewart Living? - which has also become an enormous success, a funny, sometimes cruel parody of Stewart's perpetual perfection, offering handy tips on making your own condoms and on how to sweep.
Sometimes, it is difficult to separate parody from the real thing. During a segment on her Martha Stewart Living TV show, Stewart gave this hint: "These Christian Dior pantyhose that I just ran, put them on your wrist. If you're using it for gardening, the beiges, the greens, the olives, the sage colors are really kind of nice because they blend right in with the foliage."
Stewart is also criticized for being too materialistic. Stewart, not surprisingly, disagrees: "It's not about stuff. It's about something like a soap jar, you know, the liquid soap that you keep under your sink or on your sink. And it's always there, and every time you look at it, you say, 'Oh, that thing; I'd better put it away before so-and-so comes for tea' or...It's a solution to a problem."
Would she be offended if she walked into a kitchen and found the plastic squeeze bottle sitting out on the counter? No, she says. But she does admit that she would notice it and make a mental note to send the person a nice soap jar.
This study in middle-aged American elegance started life as Martha Kostyra of Nutley, N.J., one of six children in a working-class family. She does not believe in the work ethic; she is the work ethic.
Instead of going to the football games with her friends, she says she spent her time modeling clothes at Bonwit-Teller on 57th Street. "I was making, at first, $15 an hour, which was a lot better than the $1 an hour we were getting baby sitting," she says.
She was a favorite of fashion photographers, earning her way through New York's Barnard College, where she was a star student. Then she got married, lived in the suburbs and had a family. "I've done that already," she says. "I did have the perfect baby and the perfect young child, and I did have the perfect house, and I've done all that already."
She neglects to mention the perfect husband, Andy Stewart, a publisher, who became imperfect and left her after 29 years of marriage. That was just about the time she became Martha Stewart. There is no separation in her life. All work is fun; all fun is work.
Can such a woman find happiness? Can she find a life's partner? "I know a lot of successful women who are not, at the present time, married," she says. "I hope that we could all find a balance, that you could balance a career. You can balance success; you can balance having a garden and having a husband at the same time."
Today, Martha Stewart is probably the world's most successful businesswomen. Since 1995, her finest hour came last month on the floor of the New York Stock Exchange as her company went public. In true Stewart fashion, she made a platter of brioche, a French breakfast pastry, for her visit to the stock exchange.
Shares opened at 18, soared to 52, and settled at 36. With her personal 70 percent stake in the enterprise, by the end of the day she was $1.2 billion richer. Stewart is not shy about her accomplishment: "No other woman has created this kind of business in such a short time, from scratch, from, you know, baking cookies in the basement. That's really fun."
The Stewart empire now occupies five floors in one of New York's highest rent districts, and employs 400 people. Her magazines have 9 million subscribers, and she has sold 8.5 million books. Since 1995, she has built a new television complex, where she produces her own series in partnership with CBS. And she's gone retail. Last year, Martha Stewart sold $1 billion worth of merchandise through Kmart alone.
The Stewart empire wants to fill every casual, practical and romantic need Americans might have, and even create a few along the way. The Martha Stewart weddings division is only the beginning.
"Once we get you married," she says. "Then we of course have to have the babies, of course."
Stewart expects to keep growing. In five years, she says, the growth will be "astonishing." There is no limit, she says: "It is limitless."
That was Martha three years ago. As bleak as things look for her today -do not count Martha out. She says she's ready for the fight to clear her name and challenge is what she has thrived on all her life.