Walker was born to Sigismund C. Walker, a Methodist minister and Marion Dozier Walker, who helped their daughter by teaching her philosophy and poetry as a child. Her family moved to New Orleans when Walker was a young girl. She attended school there, including several years of college before she moved north

In 1935, Margaret Walker received her Bachelors of Arts Degree from Northwestern University and in 1936 she began work with the Federal Writers' Project under the Works Progress Administration. In 1942, she received her master's degree in creative writing from the University of Iowa. In 1965, she returned to that school to earn her Ph.D.

Walker married Firnist Alexander in 1943; they had four children and lived in Mississippi. Walker was a literature professor at what is today Jackson State University (1949 to 1979). In 1968, Walker founded the Institute for the Study of History, Life, and Culture of Black People (now the Margaret Walker Alexander National Research Center) at the school. She went on to serve as the Institute's director.

Among Walker's more popular works are her poem For My People, which won the Yale Series of Younger Poets Competition in 1942 under the judgeship of editor Stephen Vincent Benet, and her 1966 novel Jubilee, which also received critical acclaim. The book was based on her own great-grandmother's life as a slave.

In 1975, Walker released three albums of poetry on Folkways Records - Margaret Walker Alexander Reads Langston Hughes, P.L. Dunbar, J.W. Johnson; Margaret Walker Reads Margaret Walker and Langston Hughes, and The Poetry of Margaret Walker. In 1988, she sued Alex Haley, claiming his novel The Saga of an American Family had violated Jubilee's copyright. The case was dismissed.

Walker died of breast cancer in Chicago, Illinois in 1998.