Fowler was born in Bloomington, Indiana, and spent the first eleven years of her life there. Her family then moved to Palo Alto, California. Fowler attended the University of California, Berkeley, and majored in political science. After having a child during the last year of her master's program, she spent seven years devoted to child-raising. Feeling restless, Fowler decided to take a dance class, and then a creative writing class at the University of California, Davis. Realizing that she was never going to make it as a dancer, Fowler began to publish science fiction stories, making a name for herself with Artificial Things (1986), a collection of short stories.

Her work as a genre writer tended toward eccentric tales of implausible history. Often these tales had a feminist theme or mindset. Her first novel, Sarah Canary (1991), was published to critical acclaim. The novel involves a group of people alienated by nineteenth century America experiencing a peculiar kind of first contact. One character is Chinese American, another putatively mentally ill, a third a feminist, and lastly Sarah herself. Fowler also collaborated with Pat Murphy to found the James Tiptree, Jr. Award in 1991, a literary prize for science fiction or fantasy that "expands or explores our understanding of gender."

Her other genre works also tended to focus on odd corners of the nineteenth century experiencing the unexpected or fantastic. Her second novel, The Sweetheart Season (1996) is a romantic comedy infused with historical and fantasy elements. However, the genre content of her stories has at times been controversial, most especially in the case of the Nebula Award winning "What I Didn't See." The story is set in 1920s Africa and has no overtly fantastical elements; it is a feminist response to the pulp magazines. Editor David Truesdale has been especially vocal in opposition to the story being considered as science fiction or fantasy in any way or form.

Her 2004 novel The Jane Austen Book Club become a critical and popular success including being on The New York Times bestsellers list. Although it is not a science fiction or fantasy work, science fiction does play an integral part to the novel's plot.

Fowler was an instructor at the Clarion Workshop 2007 in San Diego. She was one of the two Guests of Honor at Readercon 2007. In 2008, she won the Nebula Award for Best Short Story for her 2007 story "Always."

Novels

• Sarah Canary (1991) - Novel concerning a mysterious nonsense-speaking woman in 1873 Pacific Northwest.
• The War of the Roses (1991) - Chapter book publication of the novelette.
• The Sweetheart Season (1996) - Fantasy novel about the Sweetwheat Sweethearts, a female baseball team from 1947 Minnesota.
• Sister Noon (2001) - Novel set in 1890s San Francisco.
• The Jane Austen Book Club (2004) - Six members of an early 21st century book club discuss Jane Austen books.
• Wit's End (Putnam, 2008) - A young woman visits her godmother, one of America's most successful mystery writers.

Collections

• Artificial Things (1986) - Collection of 13 short stories.
• Peripheral Vision (1990) - Collection of 5 stories, 1 original. Author's Choice Monthly #6
• Letters from Home (1991) with Pat Cadigan and Pat Murphy. Collection of short fiction by Fowler, Cadigan, and Murphy.
• Black Glass (1997) - Collection of 15 short stories, 2 original. Includes the contents from Artificial Things and Letters from Home.
• What I Didn't See and Other Stories (2010) - Collection of 12 short stories, 1 original.

As editor

• MOTA 3: Courage (2003) - Anthology of short fiction.
• The James Tiptree Award Anthology 1 (2005) with Debbie Notkin, Pat Murphy and Jeffrey D. Smith. Anthology of winners of the James Tiptree, Jr. Award
• The James Tiptree Award Anthology 2 (2006) with Debbie Notkin, Pat Murphy and Jeffrey D. Smith.
• The James Tiptree Award Anthology 3 (2007) with Debbie Notkin, Pat Murphy and Jeffrey D. Smith.