Kraus graduated from New York University's Gallatin School of Individualized Study. She met Emma McLaughlin while both were attending New York University, and working as nannies. She lived as a child at 1000 Park Avenue, whose residents she claims inspired some of the characters in her fiction.

Kraus married David Wheir on June 14, 2008.

Their first novel, The Nanny Diaries, a tale about a 20-something New York nanny, reached #1 on the New York Times Best Seller list in 2002. The film version was released in 2007.