Ephron was born in New York City, eldest of four daughters in a Jewish family, and grew up in Beverly Hills; her parents, Henry and Phoebe Ephron, were both East Coast-born and raised screenwriters. Her sisters Delia and Amy are also screenwriters. Her sister Hallie Ephron is a journalist, book reviewer, and novelist who writes crime fiction. Ephron's parents based Sandra Dee's character in the play and the Jimmy Stewart film Take Her, She's Mine on their 22-year-old daughter Nora and her letters to them from college. Both became alcoholics during their declining years. Ephron graduated from Beverly Hills High School in Beverly Hills, California, in 1958, and from Wellesley College in Wellesley, Massachusetts, in 1962.

She has been married three times. Her first marriage, to writer Dan Greenburg, ended in divorce after nine years. Her second was to journalist Carl Bernstein of Watergate fame in 1976. Ephron had an infant son, Jacob, and was pregnant with her second son, Max, in 1980 when she found out the news of Bernstein's affair with their mutual friend, married British politician Margaret Jay. Ephron was inspired by the events to write the 1983 novel Heartburn, which was made into a 1986 film starring Jack Nicholson and Meryl Streep. In the book, Ephron wrote of a husband named Mark, who was “capable of having sex with a Venetian blind.” She also said that the character Thelma (based on Margaret Jay) looked like a giraffe with "big feet." Bernstein threatened to sue over the book and film, but he never did.

Ephron has been married for more than 20 years to screenwriter Nicholas Pileggi and lives in New York City.

Although Jewish by birth, Ephron is not religious. "Because you can never have too much butter ... that is my belief. If I have a religion, that's it," she told NPR in an interview about her 2009 movie, Julie & Julia.

Ephron graduated from Wellesley College in 1962 and worked briefly as an intern in the White House of President John F. Kennedy.

After a satire she wrote lampooning the Post caught the editor's eye, Ephron landed a job at the New York Post, where she stayed as a reporter for five years. In 1966, she broke the news in the Post that Bob Dylan had married Sara Lownds in a private ceremony three and a half months before. Upon becoming a successful writer, she wrote a column on women's issues for Esquire. In this position, Ephron made a name for herself by taking on subjects as wide-ranging as Dorothy Schiff, her former boss and owner of the Post; Betty Friedan, whom she chastised for pursuing a feud with Gloria Steinem; and her alma mater Wellesley, which she said had turned out a generation of "docile" women." A 1968 send-up of Women's Wear Daily in Cosmopolitan resulted in threats of a lawsuit from WWD.

While married to Bernstein in the mid-1970s, at her husband and Bob Woodward's request, she helped Bernstein re-write William Goldman's script for All the President's Men, because the two journalists were not happy with it. The Ephron-Bernstein script was not used in the end, but was seen by someone who offered Ephron her first screenwriting job, for a television movie.

Ephron's 2002 play Imaginary Friends explores the rivalry between writers Lillian Hellman and Mary McCarthy.

For many years, Ephron was among only a handful of people in the world claiming to know the identity of Deep Throat, the source for news articles written by her husband Carl Bernstein during the Watergate scandal. Ephron claims to have guessed the identity of Deep Throat through clues left by Bernstein. Among them was the fact that Bernstein referred to the source as "My Friend," the same initials as "Mark Felt", whom some suspected to be Bernstein's source.

Ephron's marriage with Bernstein ended acrimoniously, and Ephron was loose-lipped about the identity of Deep Throat. She told her son Jacob and has said that she told anyone who asked. "I would give speeches to 500 people and someone would say, ‘Do you know who Deep Throat is?’ And I would say, ‘It’s Mark Felt.’” Classmates of Jacob Bernstein at the Dalton School and Vassar College recall Jacob revealing to numerous people that Felt was Deep Throat. Curiously, the claims did not garner attention from the media during the many years that the identity of Deep Throat was a mystery. Ephron was invited by Arianna Huffington to write about the experience in the Huffington Post and now regularly blogs for the site.

Ephron produced New York Tribute, a film of collected clips from New York movies for the 2002 Academy Awards.

Nora Ephron was the host of the dinner party where Carl Sagan and Ann Druyan met. (Source: Thoughts on Life and Death at the Brink of the Millennium, 1997)

In 2007, Ephron appeared in the feature-length documentary Dreams on Spec, which profiled three aspiring Hollywood screenwriters and offered wisdom from big-name writers like James L. Brooks, Carrie Fisher, and herself.

Ephron's 6 word biography in Six-Word Memoirs by Writers Famous and Obscure by Larry Smith is: "Secret to Life, Marry an Italian."