Machado was born in Chicago, Illinois. Her parents moved to Chicago from Puerto Rico. where they had two children, Her parents subsequently divorced and her mother remarried and had three children. Machado had a traditional quinceañera. She said her family was poor, and that she grew up in the Northwest Side of Chicago. Machado said she was raised Catholic.
Machado was very active in drama, always participating in her school plays. She also took dance at Franklin Fine Arts Center. In 1986, Machado attended Lane Technical College Prep High School. During her spare time, she performed with the Latino Chicago Theater Company.
In 1990, after graduating from Lane Tech, Machado moved to New York City. The experience which she had gained as a performer with the Latino Chicago Theater Company helped open the doors for her in that city. Soon, she was offered a job as a professional actress in Los Angeles, California. Machado moved to Los Angeles and in 1996, she landed her first two acting roles. She was cast as "Elsa" in the TV series NYPD Blue episode #311, and she was also cast as "Val Cho" in the movie made for television No One Would Tell.
On June 10, 2001, Machado auditioned for the TV series Six Feet Under and was cast as Vanessa Diaz, originally a supporting character, later evolving into one of the series' main characters. Machado and her cast mates were honored with a Screen Actors Guild Award for "Outstanding Performance by an Ensemble in a Drama Series". The series completed its final season in 2005.
She has also appeared in the Canadian television series, 1-800-Missing, as a character named Sunny Estrada.
In 2009, she appeared in nine episodes on the TV series ER as Claudia Diaz. Machado also appeared in The Purge: Anarchy as Tanya, as well as Brenda in the USA series, Queen of the South.
In the 2017 remake of One Day at a Time, Machado has received positive reviews for her role as a single mother raising two children and struggling with PTSD after serving in Afghanistan.
Machado will have a recurring role in the upcoming third season of Jane the Virgin.
Machado has participated in over 15 films. Amongst her most notable roles so far have been Carmen Rodriguez in She's So Lovely, Isabella Hudson in Final Destination 2, Agent Henderson in Torque, Natalia in Little Fugitive, Teresa in Man Maid, Sofia in The Accidental Husband, and FBI Agent Rosie Gomez in the film In the Electric Mist.
Machado has also made appearances on stage, including a 2008 production of Neil LaBute's play, Some Girl(s), at the Geffen Playhouse in Los Angeles. She was in productions of Blade to the Heat and Black Butterfly at the Mark Taper Forum in Los Angeles. She was the first replacement for Andréa Burns in Broadway's In the Heights. In 2010, Machado appeared in the Los Angeles run of Love, Loss and What I Wore.
In 2003, Machado appeared in the music video for TLC's song "Damaged", the third single from their fourth studio album 3D, as a young woman trapped in an abusive relationship and unsure of what to do with her life.