Marshall was born in Oakland, California. Her mother was a book designer; her father worked in city government. Marshall came East to attend Bennington College as a literature and music major, but left without finishing and later enrolled at Harvard College, where she studied with poets Robert Lowell, Elizabeth Bishop, Robert Fitzgerald, and Jane Shore. She earned a B.A. in 1977 and was elected to Phi Beta Kappa.

Before turning to writing, Marshall worked in the publishing industry and taught.

Her first book, published in 1984, was The Cost of Loving: Women and the New Fear of Intimacy, which examines the impact of the feminist movement on the love lives of its followers.

Marshall is particularly interested in uncovering and exploring the lives of women who have been forgotten by traditional historians and biographers.

Marshall, supported by various grants and by some teaching, worked on the book The Peabody Sisters for nearly twenty years, reading original letters and documents as well as delving into the newspapers and literature of the era. The book focused on the lives of Elizabeth Palmer Peabody, Mary Tyler Peabody Mann, and Sophia Hawthorne. Marshall is currently working on a biography of Elizabeth (Ebe) Hawthorne, the older sister, mentor and muse, of Nathaniel Hawthorne. She also writes occasionally for The New Yorker, Slate, The New York Times Book Review, The London Review of Books, and other publications.

Marshall lives in Boston.

Marshall, who was named the most promising writer in her Harvard class of 1977 by Harvard Monthly, is the recipient of awards from the Guggenheim Foundation, the National Endowment for the Humanities and the Radcliffe Institute.

Aside from being a Pulitzer finalist, The Peabody Sisters was awarded the Francis Parkman Prize, the Mark Lynton History Prize, and the Massachusetts Book Award in nonfiction.