García was born in Havana to a Guatemalan father and Cuban mother. In 1961, when she was two years old, her family was among the first wave of people to flee Cuba after Fidel Castro came to power. They settled in New York City where she was raised in Queens, Brooklyn Heights, and Manhattan, in predominantly Irish, Italian, and Jewish neighborhoods. Her family, however, communicated at home in Spanish and shared many stories about Cuba during her youth, and she says that she has always thought of herself as Cuban.

In 1979 she completed a Bachelor's degree in Political Science at Barnard College, where she says a course in English stirred her interest in literature. She earned a Master's degree in International Relations from the Johns Hopkins University School of Advanced International Studies in 1981. During her graduate studies she spent a year in Italy and later returned to Europe to accept a marketing position with Procter & Gamble in West Germany, but left that job after three months.

After returning to the United States, García pursued a career in journalism. Having worked as a part-time "copy girl" with the New York Times . While at Johns Hopkins, she obtained an intern position with The Boston Globe that she held for a short time before becoming a reporter for the Knoxville Journal.

In 1983 she was hired by Time Magazine. Beginning there as a reporter/researcher, she became the publication's San Francisco correspondent in 1985, and its bureau chief in Miami for Florida and the Caribbean region in 1987. In 1988 she was transferred to Los Angeles. She terminated her employment with Time to write fiction full-time in 1990.

García's first novel, Dreaming in Cuban, was published in 1992. She has said that it contained ideas that had been percolating inside her throughout the 1980s, especially after her visit to Cuba in 1984. The book received very favorable critical attention and was nominated for the National Book Award. García gave birth to her daughter Pilar six months after its release, and says that her preoccupation with her pregnancy and giving birth had kept her from realizing the impact the book had had until she was doing book tours in 1997.

She struggled to write a strong second novel for two years before abandonning that work to start on The Agüero Sisters. which was released in 1997 and awarded the Janet Heidiger Kafka Prize. She says the inspiration for it was a visit many years earlier by a Cuban aunt to her mother in Miami that ended abruptly and left long-standing negative feelings.

While she is often portrayed as an important Cuban-American voice in American literature, she reports experiencing some unease in relating to other Cubans ... both with those still in Cuba and those in exile in Florida. Some question why she writes in English. Others take issue with her lack of engagement in anti-Castro causes. She has said she attempts to emphasize in her novels the fact that "there is no one Cuban exile".

García lived with her daughter Pilar in Los Angeles and taught at Mills College in Oakland, California.

In 2009, Garcia was hired as the Visiting Affiliate Professor and Black Mountain Institute Teaching Fellow in Creative Writing at the University of Nevada, Las Vegas, where she has been hired for one year (Fall 2009-Spring 2010) as a visiting professor.