Her book Passages was a national bestseller. A plagiarism lawsuit was filed against Sheehy by Roger Gould, a psychiatrist at the University of California at Los Angeles, who accused her of stealing from his work. The suit was settled out of court, with Gould receiving $10,000 and 10% of Sheehy's royalties.

Sheehy also borrows heavily from authors such as Daniel J. Levinson et al., authors of Seasons of a Man's Life. However these authors did not prosecute Sheehy for her early publication of their findings.

The Art Science Research Laboratory, a New York-based group that examines news articles for factual accuracy, released a 65-page report based on an article Gail Sheehy published in The New York Observer on February 16, 2004, which was critical of the 9/11 Commission.

"To publicly accuse parties of potential criminal wrongdoing is serious and damaging. That the accusations were based on facts that were only later checked and proven wrong is especially egregious," Shearer wrote in the report. "The 9/11 Commission and specifically [Executive Director] Philip Zelikow were defamed."

Sheehy's 1992 article on Hillary Clinton created a stir by quoting the First Lady mentioning rumors of an affair between President H. W. Bush and a woman named "Jennifer". Sheehy reported that Clinton complained that the media had made much about the Gennifer Flowers affair with Bill Clinton but didn't look into the Bush transgression. Clinton considered that portion of the interview off the record, but Sheehy later said she did not. Fact checkers for Vanity Fair alerted editor Tina Brown to the potential problem, based on their review of the transcript of the interview, but Brown declined to take the quote out of the story and the quote was prominent in Vanity Fair's news release about the interview, and the interview received wide coverage in the press, including front-page treatment in The New York Post and the New York Daily News tabloids.

Cynthia Cotts, one of the fact checkers, later wrote about the matter in the "Press Clips" column in The Village Voice. "After reviewing the transcript, we saw that Hillary had clearly gone off-the-record before she talked about the "Jennifer" rumors."

Clinton later said Sheehy's reporting was "a garbled version of a private conversation." Sheehy responded: "I don't think you tell a journalist about a private conversation if you don't want to have it printed."

Sheehy sent a written response to Cotts in which Sheehy at one point stated the entire interview was on-the-record, but then wrote, "I never agreed to keeping that outburst off-the-record."

Hillary's Choice, Sheehy's 1999 biography of Hillary Clinton, was praised by The New York Observer, given a damned-with-faint-praise review in The New York Times Book Review and attacked in The New Yorker, Slate online magazine and by Cynthia Cotts in the "Press Clips" column of The Village Voice.

Howard Wolfson, the press secretary for Clinton's U.S. Senate campaign, pointed to factual errors in the book. Contrary to what the biography asserted, Clinton's father did attend her graduation from Wellesley College, Wolfson said.

Some people quoted in the book said Sheehy represented their words inaccurately or changed the meaning of their words by taking them out of context:

• Garry Wills said he had described Clinton with the words "as charming as ever," but Sheehy changed that to "as Hillary as ever." Sheehy disputes that.
• Betsey Wright told The New York Observer that Sheehy took quotes out of context. In response, Sheehy offered to make the Wright transcripts available to journalists.
• Tony Podesta said that, contrary to what the book says in a footnote, he was never interviewed for the book by Sheehy. Sheehy later said one of her researchers interviewed Podesta.)

Critics said Sheehy's book was inaccurate on these other small points:

• Al Haig didn't say he was in charge after Nixon's resignation. (He did make a similar statement just after President Reagan was shot)
• Mack McLarty's marriage didn't collapse.
• Gene Lyons was not a "well-known Arkansas novelist".

Sheehy blamed some of the criticism of her book on the Clinton "attack machine".

Ben Smith, in his blog at the Web site of The Politico, observed that some of Sheehy's scoops on Clinton had been picked up by other journalists and used in their work. Smith wrote that "almost everything attempting to take a personal look at Hillary seems to go back to Sheehy," and "it may not be your sort of book but, for all its flaws, it does seem to be holding up." Carl Bernstein in his biography of Hillary Clinton, relied on some of Sheehy's reporting (on her interview with Clinton's mother and on some letters she sent to an old high school friend while in college). A front-page story in The New York Times on Sunday, July 29, 2007, was based on the same letters.