Ruhl was born in Wilmette, Illinois. She studied under Paula Vogel at Brown University (A.B., 1997; M.F.A., 2001) and did graduate work at Pembroke College, Oxford. Her play Late: A Cowboy Song was produced by Clubbed Thumb in 2003
Ruhl gained widespread recognition for her play The Clean House, a romantic comedy about a physician who cannot convince her depressed Brazilian maid to clean her house. It won the Susan Smith Blackburn Prize in 2004. It was a Pulitzer Prize finalist in 2005.
Her play Eurydice was produced off-Broadway at New York's Second Stage Theatre in June-July 2007. Prior to that it had been staged at Yale Rep (2006), Berkeley Rep (2004), Georgetown University, and Circle X Theatre.
Ruhl is also known for her Passion Play cycle that opened at Washington's Arena Stage in 2005, and subsequently was produced by the Goodman Theatre and Yale Rep. Passion Play made its New York City premiere in Spring 2010 in a production by the Epic Theatre Ensemble at the Irondale Center in Brooklyn, New York. Each part of the trilogy depicts the staging of a Passion Play at a different place and during a different historical period: Elizabethan England, Nazi Germany, and the United States from the time of the Vietnam War until the present.
Her play Dead Man's Cell Phone premiered in New York City at Playwrights Horizons in 2008 in a production starring Mary-Louise Parker. It had its world premiere at Washington D.C.'s Woolly Mammoth Theatre Company in 2007. It was produced at Oregon Shakespeare Festival in 2009.
Other plays include Orlando and Demeter in the City.
In September 2006, she received a MacArthur Fellowship. The announcement of that award stated: "Sarah Ruhl, 32, playwright, New York City. Playwright creating vivid and adventurous theatrical works that poignantly juxtapose the mundane aspects of daily life with mythic themes of love and war."
In February 2009, her play In the Next Room premiered at Berkeley Rep. The play opened on Broadway at the Lyceum Theatre with previews starting on October 22, 2009 and an official opening in November 2009. This marked Ruhl's Broadway debut. "In the Next Room" was a finalist for the 2010 Pulitzer Prize for Drama and was nominated for the 2010 Tony Award for Best Play, Best Actress, and Best Costume.
John Lahr, writing in The New Yorker, wrote of Ruhl:
But if Ruhl’s demeanor is unassuming, her plays are bold. Her nonlinear form of realism...full of astonishments, surprises, and mysteries...is low on exposition and psychology. “I try to interpret how people subjectively experience life,” she has said. “Everyone has a great, horrible opera inside him. I feel that my plays, in a way, are very old-fashioned. They’re pre-Freudian in the sense that the Greeks and Shakespeare worked with similar assumptions. Catharsis isn’t a wound being excavated from childhood.”