Munro began writing as a teenager, publishing her first story, "The Dimensions of a Shadow", in 1950 while studying English and journalism at the University of Western Ontario under a two-year scholarship. During this period she worked as a waitress, a tobacco picker, and a library clerk. In 1951, she left the university, where she had been majoring in English since 1949, to marry fellow student James Munro. They moved to Dundarave, West Vancouver, for James's job in a department store. In 1963, the couple moved to Victoria, where they opened Munro's Books, which still operates.

Munro married James Munro in 1951. Their daughters Sheila, Catherine, and Jenny were born in 1953, 1955, and 1957 respectively; Catherine died 15 hours after birth.

In 1963, the Munros moved to Victoria where they opened Munro's Books, a popular bookstore still in Business. In 1966, their daughter Andrea was born. Alice and James Munro divorced in 1972.

Munro's highly acclaimed first collection of stories, Dance of the Happy Shades (1968), won the Governor General's Award, then Canada's highest literary prize. That success was followed by Lives of Girls and Women (1971), a collection of interlinked stories. In 1978, Munro's collection of interlinked stories Who Do You Think You Are? was published (titled The Beggar Maid: Stories of Flo and Rose in the United States). This book earned Munro a second Governor General's Literary Award. From 1979 to 1982, she toured Australia, China and Scandinavia for public appearances and readings. In 1980 Munro held the position of Writer in residence at both the University of British Columbia and the University of Queensland.

Research on Munro's work has been undertaken since the early 1970s, with the first PhD thesis published in 1972. The first book-length volume collecting the papers presented at the University of Waterloo first conference on her oeuvre was published in 1984, The Art of Alice Munro: Saying the Unsayable. In 2003/2004, the journal Open Letter. Canadian quarterly review of writing and sources published 14 contributions on Munro's work, in Autumn 2010 the Journal of the Short Story in English (JSSE)/Les cahiers de la nouvelle dedicated a special issue to Munro, and in May 2012 an issue of the journal Narrative focussed on a single story by Munro, "Passion" (2004), with an introduction, a summary of the story, and five essays of analysis.

Awano writes that "Wood" is a good Example of how Munro, being "a tireless self-editor", rewrites and revises a story, in this case returning to it for a second publication nearly thirty years later. In this case, Awano says, Munro revised characterizations, themes and perspectives, as well as rhythmic syllables, a conjunction or a punctuation mark. The characters change, too. Inferring from the perspective they take on things, they are middle-age in 1980, and in 2009 they are older. Awano perceives a heightened lyricism brought about not least by the poetic precision of the revision undertaken by the author. The 2009 version is made up of eight sections instead of three in 1980, and it has a new ending. Awano writes that Munro literally "refinishes" the first take on the story, with an ambiguity that is characteristic of Munro’s endings, and that the author re-imagines her stories throughout her work a variety of ways.

Munro is noted for her longtime association with Editor and publisher Douglas Gibson. When Gibson left Macmillan of Canada in 1986 to launch his own Douglas Gibson Books imprint at McClelland and Stewart, Munro returned the advance that Macmillan had already paid her for The Progress of Love so that she could follow Gibson to the new company. Munro and Gibson have retained their professional association ever since; when Gibson published his own memoirs in 2011, Munro wrote the introduction, and to this day Gibson often makes public appearances on Munro's behalf when her health prevents her from appearing personally.

Film adaptations of Munro's short stories have included Martha, Ruth & Edie (1988), Edge of Madness (2002), Away from Her (2006), Hateship, Loveship (2013) and Julieta (2016).

Alice Munro publishes variant versions of her stories, sometimes within a short span of time. Her works "Save the Reaper" and "Passion" came out in two different versions in the same year, in 1998 and 2004 respectively. At the other end of the scale, two stories were republished in a variant version about 30 years later, "Home" (1974/2006) and "Wood" (1980/2009).

A frequent theme of her work, particularly evident in her early stories, has been the dilemmas of a girl coming of age and coming to terms with her family and the small town she grew up in. In recent work such as Hateship, Friendship, Courtship, Loveship, Marriage (2001) and Runaway (2004) she has shifted her focus to the travails of middle age, of women alone, and of the elderly. It is a mark of her style for characters to experience a revelation that sheds light on, and gives meaning to, an event.

In 2002, her daughter Sheila Munro published a childhood memoir, Lives of Mothers and Daughters: Growing Up With Alice Munro.

Almost twenty of Munro's works have been made available for free on the web. However, in most cases these are the first versions only. From the period before 2003, 16 stories have been included in Munro's own compilations more than twice, with two of her works scoring even four republications: "Carried Away" and "Hateship, Friendship, Courtship, Loveship, Marriage".

Ann Close and Lisa Dickler Awano reported in 2006 that Munro had not wanted to reread the galleys of Runaway (2004): "No, because I’ll rewrite the stories." In their symposium contribution An Appreciation of Alice Munro they say that of her story "Powers", for Example, Munro did eight versions in all.

At a Toronto appearance in October 2009, Munro indicated that she had received treatment for cancer and for a heart condition requiring coronary-artery bypass surgery.

Munro returned to Ontario to become Writer in residence at the University of Western Ontario, and in 1976 received an honorary LLD from the institution. In 1976, she married Gerald Fremlin, a cartographer and geographer she met in her university days. The couple moved to a farm outside Clinton, Ontario, and later to a house in Clinton, where Fremlin died on 17 April 2013, aged 88. Munro and Fremlin also owned a home in Comox, British Columbia.