McKennitt was born in Morden, Manitoba of Irish and Scottish descent. Her parents were Jack and Irene McKennitt.
She moved to Stratford, Ontario in 1981 and released her first album, Elemental, in 1985. McKennitt began to garner global attention with her subsequent releases of self-produced work, including To Drive the Cold Winter Away (1987), Parallel Dreams (1989), The Visit (1991), The Mask and Mirror (1994), A Winter Garden (1995) and The Book of Secrets (1997). All of her work was released under her own label, Quinlan Road.
McKennitt's life was disrupted in 1998 when her fiancee Ronald Rees and two others drowned during a boating accident. Only one of the bodies was ever recovered. She founded the Cook-Rees Memorial Fund the same year, and released an album of two live performances called Live in Paris in Toronto in which all of the profits were donated to the fund.
McKennitt is best known for her modern adaptations of traditional Celtic songs and the numerous poems she has put to music. She still lives in Stratford.