Datlow was the fiction editor of Omni magazine and Omni Online from 1981 through 1998, and edited the ten associated Omni anthologies. She co-edited the Year's Best Fantasy and Horror series from 1988 to 2008 (with co-editor Terri Windling through 2003), followed by the team of Gavin Grant and Kelly Link until the series end) She's now editing The Best Horror of the Year published by Night Shade Books. She has edited many original science fiction, fantasy, and horror anthologies on her own, as well as collaborations with Terri Windling, and one with Nick Mamatas.

She was editor of the webzine Event Horizon: Science Fiction, Fantasy, and Horror from 1998 through 1999, and was the editor of Sci Fiction until it ceased publication with its last piece of fiction, December 28, 2005.

Datlow won the Hugo Award for Best Professional Editor in 2002 and 2005, and the Hugo for Best Short Form Editor in 2009 and 2010. Her editing work has also been recognized with two Bram Stoker Awards, nine World Fantasy Awards, two International Horror Guild Awards for Best Anthology, the inaugural Shirley Jackson Award for Best anthology, four Locus Awards for Best Editor. She was named recipient of the 2007 Karl Edward Wagner Award, given at the British Fantasy Convention for "outstanding contribution to the genre." She is a long time trustee of the Horror Writers Association. She has been the co-host of the Fantastic Fiction reading series at the KGB Bar since 2000, a series which features luminaries and up-and-comers in speculative fiction.