Caballé was born in Barcelona.. After studying music at the Liceu Conservatory and singing technique under Eugenia Kemmeny teaching, she was awarded with the gold medal; then she joined the Basel Opera in 1956, where she made her professional operatic debut in 1957 as Mimì in La Bohème. For the 1960-61 season, she was engaged by the Bremen Opera, where she developed the foundations of her wide repertoire. In 1962 Caballé returned to Barcelona and made her debut at the Liceu singing the title-role in the Strauss' Arabella.

Caballé's international breakthrough came in 1965 when she substituted for an indisposed Marilyn Horne in a semi-staged performance of Donizetti's Lucrezia Borgia at New York's Carnegie Hall. While she had to learn the role in less than one month, and considering this was her first engagement in a bel canto score, her performance created a sensation and made her famous throughout the opera world. The day after the New York Times quoted "Callas + Tebaldi = Caballé". Later that year, Caballé made her debut at Glyndebourne singing her first Rosenkavalier and at the Metropolitan Opera as Marguerite in Gounod's Faust. In December 1965 she also returned at Carnegie Hall for her second bel canto opera, singing the tremendous part of queen Elizabeth I in the recently rediscovered Donizetti's Roberto Devereux (first modern performance in 1964 at San Carlo Theatre in Naples, starring Leyla Gencer). In 1966 she made her debut at Maggio Musicale Fiorentino in Trovatore (and Pirata in 1967) and in 1969 she produced an astonishing performance as Elisabetta of Valois in an all-star cast (including Domingo and Cappuccilli) at the Arena di Verona; in these performances she had to act on crutches because an accident occurred early in that year in New York City, and her la on the final "ah" at the very end of the opera has become famous, lasting for more than 20 bars up to the final accord from the orchestra, driving mad an audience of more than 10.000. In the same days she produced herself in one of the most remarkable recitals of her career at Teatro Corallo, also in Verona.

In 1970, she made her delayed "official" La Scala debut in Donizetti's Lucrezia Borgia and in 1972 her Covent Garden debut as Violetta in Verdi's La traviata. The 1974 was probably the year where Caballé reached her peak, with a number of astonishing performances: Aida at Liceu in January, Vespri at Met in March, Parisina d'Este at Carnegie Hall in March, 3 Normas in one week at Bolshoi in Moscow with Las Scala, Adriana Lecouvreur in April, Norma in Orange in July (her top single performance, filmed in video by Pierre Jourdain), the recording of Aida under Muti in July and the Duets recording with Giuseppe di Stefano in August. In September she undertook a severe surgery for sporting a huge but benign tumoral mass from her stomach. She recovered quite well and she was again on stage for Norma in early 1975.

Although best known for her bel canto roles, Caballé eventually sang over eighty operatic roles, from baroque opera to Verdi, Wagner, and Puccini, including the Marschallin in Richard Strauss's Der Rosenkavalier and the title role in Salome.

Caballé is also a noted recitalist, particularly of songs of her native Spain.

Her voice is noted for its purity, precise control, and power. She is admired less for her dramatic instincts and acting skills than for her superb technique, vocal shadings, and exquisite pianissimos.

The result of one of her brief excursions to the world of pop music, Caballé's duet with rock singer Freddie Mercury, Barcelona , was a hit single in 1987, accompanied by an album of the same name. The title track later became the anthem of the 1992 Summer Olympics which was hosted by the city, and appeared again in the pop music charts throughout Europe. Caballé also performed the song live, accompanied by a recording of the deceased Mercury, before the 1999 UEFA Champions League football final in Barcelona's Nou Camp stadium.

Since retiring from the stage, Caballé has dedicated herself to various charities. She is a UNESCO Goodwill Ambassador and she has established a foundation for needy children in Barcelona.

Caballé married the tenor Bernabé Martí in 1964. Her daughter, Montserrat Martí, is also a singer and the two occasionally perform together.