Marshall was thought to be born in Johnson City, Tennessee but there is evidence that can lead one that believe that she was born in Charlotte, North Carolina. She was the daughter of the Reverend John Ambrose Wood and Leonora Whitaker Wood. From the age of nine until her graduation from high school, Marshall was raised in Keyser, West Virginia, where her father served as pastor of a local Presbyterian Church.
In 1936 she graduated from Agnes Scott College and married Peter Marshall. The couple moved to Washington, DC, where her husband served as pastor of the New York Avenue Presbyterian Church and Chaplain of the United States Senate.
In March 1943, Catherine Marshall contracted tuberculosis, for which at that time there was no antibiotic treatment. She spent two years recovering from the illness. Her husband died in 1949 of a heart attack, leaving her to care for their 9-year-old son, Peter John Marshall, who would later also become a minister and author.
Partly as a response to considerable public affection for her husband's memory and partly to create a means of supporting herself, Marshall wrote her husband's life story as she saw it. The resulting book, A Man Called Peter was first issued in 1951. Its nationwide success (it was made into a motion picture, released in 1955) induced her to continue writing.
Marshall ended up as the author or editor of over 30 books, which have sold over 16 million copies. They include edited collections of Peter's sermons and prayers, and her own nonfiction inspirational writings. Her most successful books were A Man Called Peter  (1951), the inspirational biography of her late husband, Peter Marshall; and her novel, Christy (1967), which was inspired by the story of her own mother's journey to the mountains to teach the impoverished children of Appalachia. Christy was made into a CBS television series, starring Kellie Martin, beginning in 1994.
In 1959 Catherine married Leonard LeSourd, who worked as the editor of Guideposts Magazine for 28 years. Together they founded a book imprint, "Chosen Books".Catherine died on 18 March 1983. She was buried alongside her first husband.