Salmond was born in Wellington in 1945 and grew up in Gisborne. She was educated at the University of Auckland and the University of Pennsylvania.

She and her husband Jeremy live in Auckland and have three children. In 2000, she and her husband initiated the ecological restoration of Longbush Reserve in Gisborne.

Salmond is a Distinguished Professor of Maori Studies and Anthropology at the University of Auckland. For many years she worked closely with Eruera Stirling and Amiria Stirling, noted elders of Te Wh?nau-?-Apanui and Ngati Porou. Their collaboration led to three books about Maori life:

• Hui: A Study of Maori Ceremonial Gatherings (1975) — awarded the Elsdon Best memorial gold medal for distinction in Maori ethnology in 1976
• Amiria: The Life of a Maori Woman, which won a Wattie Book of the Year Award in 1977
• Eruera: Teachings of a Maori Elder won first prize in the Wattie Book of the Year Awards in 1981

Salmond's work then turned to cross-cultural encounters in the Pacific, resulting in a series of works:

• Two Worlds: First Meetings Between Maori and Europeans 1642-1772 (1991) which won the National Book Award (Non-Fiction) in 1991, and the Ernest Scott Prize in 1992
• Between Worlds: Early Exchanges Between Maori and Europeans 1773-1815 (1997) which won the Ernest Scott Prize in 1998
• The Trial of the Cannibal Dog: Captain Cook in the South Seas (2003), which won the History Category and the Montana Medal for Non Fiction at the Montana New Zealand Book Awards 2004
• Aphrodite's Island: the European Discovery of Tahiti (in press).

In 2004, Salmond received the Prime Minister's Award for Literary Achievement for non-fiction. She is currently writing a book about William Bligh in Tahiti.

Salmond has served on the boards of the Foundation for Research, Science and Technology, the Museum of New Zealand, and she was chair of the New Zealand Historic Places Trust from 2001 to 2007. She was Pro-Vice Chancellor (Equal Opportunity) at the University of Auckland from 1997 to 2006.

In 1988 she received the CBE for services to literature and the Maori people and in 1990 she was made a Fellow of the Royal Society of New Zealand. In 1995 she became a Dame Commander of the British Empire for services to New Zealand history.

In November 2007, she was elected as an inaugural Fellow of the New Zealand Academy for the Humanities, Te M?tanga o Te Wh?inga Aronui. In 2008, she was elected a Corresponding Fellow of the British Academy, and in 2009, she was elected a Foreign Associate of the National Academy of Sciences — the first New Zealander known to have achieved this double distinction.