In 1892, when Porter was two years old, her mother died two months after giving birth to her last child. Porter's father took his four surviving children (an older brother had died in infancy) to live with his mother, Catherine Ann Porter, in Kyle, Texas. The depth of her grandmother's influence can be inferred from Porter's later adoption of her name. Her grandmother died while taking eleven-year-old Callie to visit relatives in Marfa, Texas.

After her grandmother's death, the family lived in several towns in Texas and Louisiana, staying with relatives or living in rented rooms. She was enrolled in free schools wherever the family was living, and for a year in 1904 she attended the Thomas School, a private Methodist school in San Antonio, Texas. This was her only formal education beyond grammar school.

In 1906, at age sixteen, Porter left home and married John Henry Koontz in Lufkin, Texas. She subsequently converted to his religion, Roman Catholicism. Koontz, the son of a wealthy Texas ranching family, was physically abusive; once while drunk, he threw her down the stairs, breaking her ankle. They divorced officially in 1915.

In 1914 she escaped to Chicago, where she worked briefly as an extra in movies. She then returned to Texas and worked the small-town entertainment circuit as an Actress and singer. In 1915, she asked that her name be changed to Katherine Anne Porter as part of her divorce decree.

Also in 1915, she was diagnosed with tuberculosis and spent the following two years in sanatoria, where she decided to become a Writer. It was discovered during that time, however, that she had bronchitis, not TB. In 1917, she began writing for the Fort Worth Critic, critiquing dramas and writing society gossip. In 1918, she wrote for the Rocky Mountain News in Denver, Colorado. In the same year, Katherine almost died in Denver during the 1918 flu pandemic. When she was discharged from the hospital months later, she was frail and completely bald. When her hair finally grew back, it was white and remained that color for the rest of her life. Her experience was reflected in her trilogy of short novels, Pale Horse, Pale Rider (1939), for which she received the first annual gold medal for literature in 1940 from the Society of Libraries of New York University.

In 1919, Porter moved to Greenwich Village in New York City and made her living ghost writing, writing children's stories and doing publicity work for a motion picture company. The year in New York City had a politically radicalizing effect on her; and in 1920, she went to work for a magazine publisher in Mexico, where she became acquainted with members of the Mexican leftist movement, including Diego Rivera. Eventually, however, Porter became disillusioned with the revolutionary movement and its Leaders. In the 1920s she also became intensely critical of religion and remained so until the last decade of her life, when she again embraced the Roman Catholic Church.

Between 1920 and 1930, Porter traveled back and forth between Mexico and New York City and began publishing short stories and essays. Her first published story was "Maria Concepcion" in The Century Magazine. (In his 1960s novel Providence Island, Calder Willingham had the character Jim fantasize a perfect lover and he called her Maria Concepcion Diaz.) In 1930, she published her first short-story collection, Flowering Judas and Other Stories. An expanded edition of this collection was published in 1935 and received such critical acclaim that it alone virtually assured her place in American literature.

In 1926, Porter married Ernest Stock and lived briefly in Connecticut before divorcing him in 1927. Some biographers suggest that Porter suffered several miscarriages, at least one stillbirth between 1910 and 1926, and an abortion; and after contracting gonorrhea from Stock, that she had a hysterectomy in 1927, ending her hopes of ever having a child. Yet Porter's letters to her lovers suggest that she still intimated her menstruation after this alleged hysterectomy. As she once confided to a friend, "I have lost children in all the ways one can."

During the 1930s, Porter spent several years in Europe during which she continued to publish short stories. In 1930, she married Eugene Pressly, a Writer. In 1938, upon returning from Europe, she divorced Pressly and married Albert Russel Erskine, Jr., a graduate student. He reportedly divorced her in 1942 after discovering her real age and that she was 20 years his senior.

Porter became an elected member of the National Institute of Arts and Letters in 1943, and was a writer-in-residence at several colleges and universities, including the University of Chicago, the University of Michigan, and the University of Virginia.

Three of Porter's stories were adapted into radio dramas on the program NBC University Theatre. "Noon Wine" was made into an hour drama in early 1948 and two years later "Flowering Judas" and "Pale Horse, Pale Rider" each were produced in half-hour dramas on an episode of the hour-long program. Porter herself made two appearances on the radio series giving critical commentary on works by Rebecca West and Virginia Woolf. In the 1950s and '60s she occasionally appeared on television in programs discussing literature.

Porter published her only novel, Ship of Fools in 1962, based on her reminiscences of a 1931 ocean cruise she had taken from Vera Cruz, Mexico, to Germany. The novel's success finally gave her financial security (she reportedly sold the film rights for Ship of Fools for $500,000). Producer David O. Selznick was after the film rights; but United Artists who owned the property, demanded $400,000. The novel was adapted for film by Abby Mann; Producer and Director Stanley Kramer featured Vivien Leigh in her final film performance.

Despite Porter's claim that after the publication of Ship of Fools she would not win any more prizes in America, in 1966 she was awarded the Pulitzer Prize and the U.S. National Book Award for The Collected Stories of Katherine Anne Porter. That year she was also appointed to the American Academy of Arts and Letters.

In 1977, Porter published The Never-Ending Wrong, an account of the notorious trial and execution of Sacco and Vanzetti, which she had protested 50 years earlier.

Porter died in Silver Spring, Maryland, on September 18, 1980, at the age of 90, and her ashes were buried next to her mother at Indian Creek Cemetery in Texas. In 1990, Recorded Texas Historic Landmark number 2905 was placed in Brown County, Texas, to honor the life and career of Porter.