She is the daughter of two patrons of New York City's avant-garde, Frederick Eberstadt, a photographer and psychotherapist, and Isabel Eberstadt, a writer. Her paternal grandfather was Ferdinand Eberstadt, a Wall Street financier and adviser to presidents; her maternal grandfather was the poet Ogden Nash.
She went to the Brearley School in New York City. As a teenager, she worked at Andy Warhol's Factory and for Diana Vreeland at the Metropolitan Museum. Her first published piece was a profile in Andy Warhol's "Interview" in 1979 of the travel writer Bruce Chatwin.
At age eighteen, Eberstadt moved to the United Kingdom where she graduated from Magdalen College, Oxford in 1982. with a double first.
In 1985, Alfred A. Knopf, Inc. published the twenty-five-year old Eberstadt's first work of literary fiction, titled Low Tide. Praise for her work landed her an interview with intellectual William F. Buckley on his television program, Firing Line, where she appeared with Bret Easton Ellis, who had published "Less Than Zero" the same year. Low Tide is the story of a young girl's romance with two brothers and draws heavily on her Manhattan upbringing. The same year, Eberstadt discussed the author of Survival in Auschwitz, Primo Levi, in an article in Commentary magazine. An essay in The Cambridge Companion to Primo Levi by Bryan Cheyette describes the article as follows: "The problem with Levi, clearly, is that he is not Eli Wiesel ... Levi's secular humanism offers a completely different representation of the Holocaust to that of Wiesel." Levi autobiographer Ian Thomson's 2002 volume Primo Levi characterizes Eberstadt's “eight-page attack” as motivated mainly by a “desire to inflict damage on Levi's reputation as a liberal Diaspora Jew.” (p.482) Shortly after Eberstadt's article, Levi wrote to his translator that “It is not merely for this episode that I have lost my good humour and the will to live” (p.483); in April 1987 Levi died under circumstances widely believed to be suicide.
Her next novel Isaac and His Devils came in 1991 and was again widely acclaimed, described by Library Journal as a "rich novel, full of promise for the author's future." Set in rural New Hampshire, the novel tells the story of Isaac Hooker, a half-deaf, and half-blind, hugely fat and ambitious boy-genius who tries to fulfill his parents dreams.
Her third novel, published in 1997 and set in the late 1980s New York art world, When the Sons of Heaven Meet the Daughters of the Earth, recounted the rise and fall of the now grown up Isaac painter.
Eberstadt began writing essays and criticism for such publications as Commentary, The New Yorker, Vogue, New York Times Magazine, and Vanity Fair.
Her widely cited essay "The Palace and the City," about the Sicilian writer Lampedusa and the politics of urban restoration in Palermo, was published in the December 23, 1991 issue of The New Yorker.
In more recent years, she has worked extensively for The New York Times Magazine, publishing profiles of the Nobel Prize-winning novelist Orhan Pamuk, of Moroccan-based Spanish writer Juan Goytisolo ,and the Portuguese novelist Jose Saramago, as well as of indie-rock group Cocorosie.
Following her pattern of a six-year interval between novels, Eberstadt published The Furies in 2003. Praised by Kirkus Reviews, Booklist, Publishers Weekly, and the New York Times Book Review, fellow writer Bret Easton Ellis called it "spellbinding", and the New York Observer said "The Furies veers pretty close to genius."
John Updike, reviewing "Little Money Street" in "The New Yorker," described Eberstadt as "ambitious, resourceful novelist."
In 1998, Eberstadt went to live on a vineyard in the French Pyrenees, outside the city of Perpignan. She became friends with a family of French gypsy musicians. Her first work of non-fiction, Little Money Street - In Search of Gypsies and Their Music in the South of France, which portrays that friendship, was released by Knopf in March 2006. Luc Sante called the book "passionate, intimate, at once exhilarating and despairing, a rich and profound work of high nonfiction literature. A portrait of the Gypsies of southwestern France, it is also about family, about consumerism, and about the ruthlessness of a world in which there is no more open world."
Eberstadt and her husband, Alaistair Meddon Oswald Bruton, a journalist whom she married on June 5, 1993, live in France; they have two children.
Her sixth book, a novel called RAT, was published by Alfred A. Knopf in March 2010. RAT tells the story of a 15-year-old girl who set off on a journey from rural France to London, with her adopted brother in search of her birth father and a better life. It received very good reviews with Booklist calling it "mythic, gritty and unforgettable."