Yates was born in Atlanta to John Kelley Quillian (1930–1986), an attorney and judge who served as a judge on the Georgia Court of Appeals between 1966 and 1984, and his wife, Xara "Mickey" DeBeaugrine Quillian (née Terrell; 1931–2012), an interior designer. Her grandmother had been one of the first women admitted to the Georgia Bar; however, she was not hired as an attorney, instead working as a legal secretary for Yates's grandfather.

The New York Times and others drew comparisons to the 1973 Saturday Night Massacre, during the Watergate scandal, when Attorney General Elliot Richardson and Deputy Attorney General william Ruckelshaus both resigned after refusing to carry out President Richard Nixon's order to dismiss special prosecutor Archibald Cox. By analogy, some cable networks began calling Yates's dismissal the "Monday Night Massacre". However, Watergate investigative Journalist Carl Bernstein, speaking on CNN, rejected the comparison. "There's a big difference, because the Saturday Night Massacre was really about firing the attorney general when Nixon was the target of an investigation and was actively obstructing justice", he said. "I think the President is within his rights here to fire the attorney general, that he has that ability."

Yates attended the University of Georgia, receiving her Bachelor of Arts degree in journalism in 1982. In 1986, she earned a Juris Doctor degree from the University of Georgia School of Law, graduating magna cum laude. While in law school, Yates served as the executive Editor of the Georgia Law Review.

In 1986, Yates was admitted to the State Bar of Georgia. From 1986 to 1989, Yates was an associate at the law firm King & Spalding in Atlanta, specializing in commercial litigation. In 1989, she was hired as Assistant U.S. Attorney by Bob Barr for the U.S. Attorney's Office for the Northern District of Georgia. Early in her career at the Department of Justice, Yates prosecuted a variety of types of cases including white-collar fraud and political corruption. In 1994, she became Chief of the Fraud and Public Corruption Section. She was the lead prosecutor in the case of Eric Rudolph, who committed the Centennial Olympic Park bombing, a terrorist convicted for a series of anti-abortion and anti-gay bombings across the southern United States between 1996 and 1998, which killed two people and injured over 120 others. She rose to First Assistant U.S. Attorney in 2002 and to Acting U.S. Attorney in 2004. In the U.S. Attorney's office she held leadership positions under both Republican and Democratic administrations.

Yates's husband, J. Comer Yates, is an executive Director of the Atlanta Speech School. In 1994 and 1996, he unsuccessfully ran for Congress as a Democrat. The couple has two children, a daughter, Kelley Malone and a son, James "Quill" Quillian.

President Barack Obama nominated Yates to be U.S. Attorney in the Northern District of Georgia. She was confirmed by the Senate on March 10, 2010. Yates was the first woman to hold that position in the Northern District of Georgia. During her time as a U.S. Attorney, Yates was appointed by Attorney General Eric Holder to serve as Vice Chair of the Attorney General's Advisory Committee.

As Deputy Attorney General, Yates was responsible for the day-to-day operations of the Justice Department, which included approximately 113,000 employees. In 2015, she authored the policy, known as the "Yates memo", prioritizing the prosecution of executives for corporate crimes. During the final days of the Obama administration, she oversaw the review of 16,000 petitions for executive clemency, making recommendations to the President.

In January 2016, Yates received Emory University School of Law's Emory Public Interest Committee (EPIC) Inspiration Award. Following Yates's dismissal as Acting Attorney General, Representative Jackie Speier nominated her for the John F. Kennedy Profile in Courage Award, and Georgia State Senator Elena Parent introduced a resolution commending Yates. In April 2017, Yates received the Mary Church Terrell Freedom and Justice Award during the Detroit NAACP's 62nd Annual Fight for Freedom Fund Dinner.

On May 8, 2017, Yates and James Clapper testified for three hours before the Senate Judiciary's Subcommittee on Crime and Terrorism over the Russian interference in the 2016 U.S. election. Yates said the FBI interviewed then-National Security Advisor Michael T. Flynn on January 24, 2017. Because of that interview she made an "urgent" request to meet with White House Counsel Don McGahn. She met with him on January 26 and again on January 27. She informed McGahn that Flynn was "compromised" and possibly open to blackmail by the Russians. As previously reported, she told McGahn that Flynn had misled Vice President Mike Pence and other administration officials about the nature of his conversation with the Russian ambassador. She said Flynn's "underlying conduct", which she could not describe due to classification, "was problematic in and of itself," adding "(i)t was a whole lot more than one White House official lying to another."

Representative Jackie Speier nominated Yates for the John F. Kennedy Profile in Courage Award. Georgia State Senator Elena Parent introduced a resolution commending Yates. Democratic Party operatives in Georgia began recruiting Yates to run for Governor of Georgia in the 2018 election.