Satrapi was born in Rasht, Iran, and is of Gilak and Turkic (Qajar) origin. She grew up in Tehran in a middle-class Iranian family. Both her parents were politically active and supported Marxist causes against the monarchy of the last Shah. When the Iranian Revolution took place in 1979, they were dismayed and intimidated by the Muslim fundamentalists who took power.

Her parents grew concerned that the young Marjane, a strong-willed and rambunctious teenager, would run afoul of the strict new public codes for women. They arranged for her to study abroad, and in 1983 she arrived in Vienna, Austria to attend the Lycée Français de Vienne. According to her autobiographical graphic novel, Persepolis, she stayed in Vienna through her high-school years, staying in friends' homes, but spent three months living on the streets. After an almost deadly bout of pneumonia, she returned to Iran. She studied visual communication, eventually obtaining a master's degree from Islamic Azad University in Tehran.

Satrapi became famous worldwide because of her critically acclaimed autobiographical graphic novels, originally published in French in four parts in 2000–2003 and in English translation in two parts in 2003 and 2004, respectively, as Persepolis and Persepolis 2, which describe her childhood in Iran and her adolescence in Europe. Persepolis won the Angoulême Coup de Coeur Award at the Angoulême International Comics Festival. Her later publication, Embroideries (Broderies), was also nominated for the Angoulême Album of the Year award in 2003, an award that was won by her novel Chicken with Plums (Poulet aux prunes). She has also contributed to the Op-Ed section of The New York Times.

Persepolis was adapted into an animated film of the same name. It debuted at the 2007 Cannes Film Festival in May 2007 and shared a Special Jury Prize with Silent Light (Luz silenciosa) by Carlos Reygadas. Co-written and co-directed by Satrapi and Director Vincent Paronnaud, the French-language picture stars the voices of Chiara Mastroianni, Catherine Deneuve, Danielle Darrieux, and Simon Abkarian. The English version, starring the voices of Gena Rowlands, Sean Penn, and Iggy Pop, was nominated for an Academy Award for Best Animated Feature in January 2008. With this, she became the first woman to be nominated for the award.

Persepolis was a very successful film both commercially (with over a million admissions in France alone) as well as critically, winning the Best First Film at the César Awards 2008. As such the film reflects many tendencies of first-time filmmaking in France (which makes up around 40% of all French cinema each year), notably in its focus on very intimate rites-of-passage, and quite ambivalently recounted coming-of-age moments.

Following the Iranian elections in June 2009, Marjane Satrapi and Iranian filmmaker Mohsen Makhmalbaf appeared before Green Party members in the European Parliament to present a document allegedly received from a member of the Iranian electoral commission claiming that the reform candidate Mir Hossein Mousavi had actually won the election, and that the conservative incumbent Mahmoud Ahmedinejad had received only 12% of the vote.

Satrapi and Paronnaud continued their successful collaboration with a second film, a live-action adaptation of Chicken with Plums, released in late 2011. A year later, in 2012, Satrapi directed and acted in the comedy crime film Gang of the Jotas, from her own screenplay.

During this time, Satrapi went to numerous illegal parties hosted by her friends, where she met a man named Reza, a veteran of the Iran–Iraq War. She married him at the age of 21, but they divorced a couple of years later. Satrapi then moved to Strasbourg, France.

In 2014 Satrapi directed the comedy-horror film The Voices, from a screenplay from Michael R. Perry.