One of four siblings who survived infancy, Walls was born in Phoenix, Arizona to Rex Walls (deceased 1994), an electrician, and Rose Mary Walls, an artist. As detailed in The Glass Castle, Walls' family life was rootless, with the family shuttling from Arizona, California, Battle Mountain, Nevada, and Welch, West Virginia, with periods of homelessness. Walls moved to New York City at age 17 and graduated in 1984 with honors from Barnard College.

Walls married Eric Goldberg in 1988 (divorced, 1996) and now lives outside Culpeper, Virginia, with her husband, journalist John J. Taylor, a former writer for Esquire and the author of The Count and the Confession: A True Murder Mystery, Falling: The Story of One Marriage, and Circus of Ambition: The Culture of Wealth and Power in the Eighties.

Walls has written for New York (the "Intelligencer" column 1987-1993), Esquire (1993—1998), and USA Today, and has appeared on The Today Show, CNN, Primetime, and The Colbert Report. She contributed regularly to the gossip column "Scoop" at MSNBC.com from 1998 until her departure to write full-time in 2007.

In 2000, Walls published the book Dish: The Inside Story on the World of Gossip in which she, incidentally, outed conservative cyber-gossip Matt Drudge as gay.

In 2005, Walls published the bestselling memoir The Glass Castle, now under development as a film by Paramount. By late 2007, The Glass Castle had sold over 1.5 million copies, had been translated into 16 languages, and received the Christopher Award, the American Library Association's Alex Award (2006) and the Books for Better Living Award.

In 2009, Walls published her first fiction book, Half Broke Horses: A True-Life Novel, based on the life of her grandmother Lily Casey Smith.