In the 1960s Kate was first part of the Mountain City Four (MC4), a group that played the Montreal folk scene, before moving to the US and touring the North-East on the folk club circuit in a duo with Roma Baran. She married American folk singer Loudon Wainwright III in the early 1970's. Around the same time, she began circulating tapes around Greenwich Village, of herself and older sister Anna performing. This attracted songwriting credits for names such as Linda Ronstadt and Maria Muldaur, raising the profile of the sisters and finally garnering them a recording deal with undefined. The sisters went on to have much success in the mid 1970's as the duo Kate & Anna McGarrigle. After putting their careers on hold for most of the 1980's to raise their children, they then made a successful comeback in the 1990s. She was made a Member of the Order Of Canada in 1994 and received the Governor's General Award in 2004.

In 2006, she was diagnosed with a rare form of cancer called clear-cell sarcoma. Two years later she set up The Kate McGarrigle Fund (in the US known as the [l=Kate McGarrigle Foundation]), a charity that would help support research about the rare cancer. It raises money through donations from concerts by her friends and relatives, as well as a few related live album releases. She is the mother of Martha Wainwright and Rufus Wainwright from her marriage to Loudon Wainwright III.