Carpenter, the daughter of a Life Magazine executive, spent two years in Japan as a child, moving to Washington, D.C. in 1974. She graduated from Brown University. Washington's vibrant music scene gave birth to her first album, Hometown Girl, in 1987, which was produced by Grammy-nominated guitarist and singer-songwriter John Jennings. The two collaborated on many subsequent albums and performed together.

One of her most widely known singles is "Passionate Kisses" (written by fellow singer-songwriter Lucinda Williams), a song with a rock flavor musically and lyrics listing simple desires such as "a comfortable bed", "food to fill me up", and "time to think". Another big hit was "Down at the Twist and Shout", which she performed in January 1997 at Super Bowl XXXI in New Orleans. A number of Mary Chapin Carpenter's songs speak to women, urging them on through hard times or troubled relationships. In "He Thinks He'll Keep Her", co-composed by Carpenter and Don Schlitz, the singer makes the case for strength and self-respect. Another common theme in her music is that of taking life at your own pace, rather than rampant goal-driven materialism, such as "The Long Way Home" from her 2001 album Time*Sex*Love, which pokes fun at a man who "retire(s) at thirty to his big-ass house next to the putting green." The album had a different feel musically, incorporating elaborate orchestra melodies, but with the characteristic lyrical depth. Her latest album Between Here and Gone was released in 2004.

Carpenter has won five Grammy Awards: Best Female Country Vocal Performance for 1991 through 1994, and also Best Country Album for 1994.

In addition to her solo work, her career has included a number of collaborations with artists such as Joan Baez, Dolly Parton, and Shawn Colvin.

She was married in 2002 in Virginia to a contractor. Throughout her career, she has actively supported various charities, including CARE and Habitat for Humanity, and has conducted fundraising concerts for such causes as the elimination of landmines.