Marshall's first instrument was a 1950s Silvertone guitar, which she did not touch for a year after buying it, because she considered it a piece of "art in the corner." Marshall taught herself to play guitar. She began playing music in Atlanta with a collective of Musicians made up of Glen Thrasher, Marc Moore, Damon Moore and Fletcher Liegerot, who would get together for jam sessions in a basement. The group were booked for a show and had to come up with a name quickly, when a man walked through the door of the pizzeria where Marshall worked, wearing a Caterpillar trucker cap that read: "Cat Diesel Power". Marshall immediately decided on Cat Power as the name of the band. While in Atlanta, Marshall played her first live shows as support to her friends' bands, including Magic Bone and Opal Foxx Quartet. Due to her close relationships with the various people involved, she has stated that her involvement in music at this time was primarily a social interest rather than an artistic one. In a 2007 interview she explained that the music itself was more experimental and that playing shows was often an opportunity for her and her friends "to get drunk and take drugs". A number of her local peers became entrenched in heroin use, and this contributed to her Desire to leave Atlanta.

Charlyn Marie Marshall was born January 21, 1972 in Atlanta, Georgia, the second child of Charlie Marshall, a blues musician and Pianist, and Myra Lee Marshall (née Russell). She has one older sister, Miranda "Mandy." Her parents divorced in 1979 and remarried shortly thereafter. Her mother remarried and had a son Lenny, and the family travelled around often because of her stepfather's profession.

Born in Atlanta, Marshall was raised throughout the southern United States, and began performing in local bands in Atlanta in the early 1990s. She was discovered opening for Liz Phair in 1994 by Steve Shelley of Sonic Youth and Tim Foljahn of Two Dollar Guitar, with whom she recorded her first two albums, Dear Sir (1995) and Myra Lee (1996), on the same day in 1994. In 1996 she signed with Matador Records, and released a third album of new material with Shelley and Foljahn, What Would the Community Think. Following this she released the critically acclaimed Moon Pix (1998), recorded with members of Dirty Three, and The Covers Record (2000), a collection of sparsely-arranged cover songs.

In 1992, at the age of 20, she moved to New York City with Glen Thrasher. It was Thrasher who introduced her to New York's free jazz and experimental music scene. In particular she cites a concert by Anthony Braxton with giving her the confidence to perform in public. Her first New York show was at a warehouse in Brooklyn and she has described her early New York shows as "more improvisational." One of her shows during this period was as the support act to Man or Astro-man? and consisted of her playing a two-string guitar and singing the word "no" for fifteen minutes. Around this time she met the band God Is My Co-Pilot, who assisted with the release of her first single, "Headlights," in a limited run of 500 copies on their Making of Americans label.

Marshall recorded simultaneously her first two albums Dear Sir and Myra Lee in December 1994 in a small basement studio near Mott Street in New York City, with Guitarist Tim Foljahn and Sonic Youth Drummer Steve Shelley; Marshall and Shelley had initially met after she played a show opening for Liz Phair in 1993. A total of 20 songs were recorded in a single day by the trio, all of which were split into two records, making up Dear Sir and Myra Lee, released respectively in October 1995 and March 1996. Although Dear Sir is considered Marshall's debut album, due to its shorter length, she expressed herself in a 1996 interview that she considered it an EP.

In 1996, Marshall signed to Matador Records and in September released her third album, What Would the Community Think, which she recorded in Memphis, Tennessee, in February 1996. The album was produced by Shelley and again featured Shelley and Foljahn as backing Musicians, and spawned a single and music video, "Nude as the News". Critics cited the album as evidence of her maturation as a singer and Songwriter from the "dense and cathartic" material of her first two releases.

In 1997, Marshall moved to Portland, Oregon, planning to retire from the music Business, and then relocated to a rural farmhouse in Prosperity, South Carolina. While living alone in the farmhouse, Marshall experienced a hypnogogic nightmare that became the inspiration for her following album, Moon Pix, released in 1998. Moon Pix was recorded at Sing Sing Studios in Melbourne, Australia in 11 days with backing Musicians Mick Turner and Jim White of the Australian band Dirty Three. It was well received by critics, and along with an accompanying music video for the song "Cross Bones Style", helped her gain further recognition. Rolling Stone would later describe it as her 'breakthrough' record.

In early 2000s, Marshall's live performances had become erratic and unpredictable, and The New Yorker suggested, "It is foolhardy to describe a Cat Power event as a concert," citing "rambling confessions" and "[talking] to a friend's baby from the stage." Marshall later attributed this period to a drinking Problem, telling HARP magazine in 2006: "I didn't know I was messed up." Marshall has admitted abusing alcohol in the past; in a 2006 interview with The New York Times, she declared herself to be sober, which she defined as having had "seven drinks in seven months."

In 2001, Marshall was romantically involved with a runway model, Daniel Currie. He separated her in 2003 at a time when she was drinking heavily and abusing other drugs. Marshall referred to him as "the ex-love of my life."

Around 2003 she bought a house in South Beach, Miami, from a high school friend. In 2009 Marshall moved to Los Angeles to share a house in Silver Lake, California with her then-boyfriend. They also had a rental house in Malibu where she had a studio.

Following the cancellation of the arranged tour of the Greatest album in 2006, Marshall used the hiatus to recover from what she described as a "psychotic break" brought on by mental exhaustion and alcohol abuse, which had left her feeling suicidal. As part of her recovery, she was admitted to the psychiatric ward at Mount Sinai Medical Center & Miami Heart Institute but left after a week, stating: "being in there wasn't me." She later likened the experience to "a pit of hell." Marshall gave a first person account of her breakdown in an interview for the November 2006 issue of Spin.

Marshall has also had forays into acting: She had a minor supporting role in the 2007 film My Blueberry Nights opposite Jude Law. She also appeared in Doug Aitken's MOMA installation Sleepwalkers, which followed the nocturnal lives of five city dwellers. Marshall can be seen as a postal worker living in New York, performing with other notable participants such as Tilda Swinton. In July 2015 it was announced that Marshall would be providing narration for the documentary Janis: Little Girl Blue directed by Amy J. Berg which revolves around the life of Janis Joplin and premiered in September at the 2015 Venice Film Festival. On television, Marshall starred on China, IL, in the hour-long musical special "Magical Pet". Marshall performs three original songs written by creator Brad Neely.

In January 2008, Marshall released her second covers album, Jukebox. Recorded with her recently assembled "Dirty Delta Blues Band", which consisted of Judah Bauer from the Blues Explosion, Gregg Foreman of The Delta 72, Erik Paparazzi of Lizard Music and Jim White of Dirty Three, the album featured the original song "Song to Bobby," Marshall's tribute to Bob Dylan, and a reworking of the Moon Pix song "Metal Heart." She also collaborated with Beck and Producer Danger Mouse on the album Modern Guilt (2008): She contributed backing vocals to two tracks, "Orphans" and "Walls". The album was released in July of that year. In December 2008, she released Dark End of the Street, an EP consisting of songs left over from the Jukebox sessions.

A live version of the gospel song "Amazing Grace"—culled from a performance with the Dirty Delta Blues band—was released on the charity compilation Dark Was the Night. Released by independent British label 4AD on February 17, 2009, the set benefited the Red Hot Organization, an international charity dedicated to raising funds and awareness for HIV and AIDS. She also appeared in a PETA ad, encouraging people to spay and neuter their pets.

On December 25, 2011, Marshall released a reworking of the What Would the Community Think track "King Rides By" for download from her official website, with all proceeds from sales of the track being donated to The Festival of Children Foundation and The Ali Forney Center. A music video directed by Giovanni Ribisi and featuring Filipino boxer and Politician Manny Pacquiao was released to promote the song.

In 2012, after the release of Sun, Marshall began having trouble breathing and was hospitalized multiple times, though doctors were unable to diagnose her. "I thought I was dying," she recounted. "They told me they were going to put me in a coma to save my lungs. My friend came to visit and told me I'd made the Billboard Top 10 and all I could think was: 'I don't want to die.'" Marshall was subsequently diagnosed with hereditary angioedema, an immune disorder that causes sporadic swelling of the face and throat. In September 2012, she stated she had been hospitalized due to the condition over eight times, which led her to cancel her European tour.

In April 2015, Marshall announced that she recently had a baby, but did not name the child's father.

On July 28, 2017, Marshall announced on Instagram that her tenth studio album was "ready to go", although she did not disclose its title or expected release date. It will be her first album since 2012's Sun.

In 2018, Marshall will perform a Moon Pix 20th anniversary concert at Sydney Opera House. It will feature album collaborators Jim White and Mick Turner.