His family left Ethiopia when he was two years old, and he was raised in the suburbs of Chicago, Illinois. He received his B.A. in English from Georgetown University, and his MFA in fiction from Columbia University.

His début novel The Beautiful Things that Heaven Bears was published in the USA in March 2007 by Penguin Riverhead (ISBN 1594489408). It tells the story of Sepha Stephanos, who seventeen years ago fled the Ethiopian Revolution for a new start in the United States. Now he runs a failing grocery store in a poor African-American section of Washington, D.C., his only companions two fellow African immigrants who share his bitter nostalgia and longing for his home continent. Years ago and worlds away, Sepha could never have imagined a life of such isolation. As his environment begins to change, hope comes in the form of a friendship with new neighbors Judith and Naomi, a white woman and her biracial daughter. But when a series of racial incidents disturb the community, Sepha may lose everything all over again.

The novel was published in the UK as Children of the Revolution in May 2007 by Jonathan Cape (ISBN 9780224079310). It has been translated into more than a dozen languages.

Mengestu's second novel, How to Read the Air, is slated for release in October 2010. Part of the novel was excerpted in the July 12, 2010 issue of The New Yorker, after Mengestu was selected as one of their "20 under 40" writers of 2010.