Katalin was born into a family of impoverished nobility on August 22, 1802, in Hălmeag, Transylvania. Her father János Varga and her mother Katalin Rosondai were minor landowners, and they worked their land themselves. The only reference to their state of nobility can be found in one petition dating from 1846. From the age of 10, Katalin was raised by her aunt, along with her younger sister Ilonka and her brother. Other than her native language, Hungarian, she also spoke Romanian and German. Confessionwise, she was a Lutheran. At the age of 20, she married György Kelemen, a wealthy wheeler, whose two children she raised. She also joined him in his business, hemp trading. In the early days, the business made profit; but later they gave credit to customers who did not pay it back. In the meantime, Katalin and György divorced, and he died shortly after.
A certain rope-maker of Braşov owed her the sum of 631 forints. She brought a suit against him to Braşov's borough council, which brought no results, so she also traveled to Vienna to ask for help at the royal court there. On August 1, 1839, the Royal Chancery declared that they could not reach a decision, and sent the case back to Braşov. Here the case lingered without resolution, so in April 1840 she returned to Vienna, where the court demanded that the Brasov borough council settle the matter. Again and again no resolution could be reached, and finally the case was dismissed and sent to archive by the district judge. Katalin Varga put her property losses behind her and attempted to start her life anew. In 1840, during the course of her travels to and from Vienna, she had met with mineworkers from the villages of Abrud-Sat, Bucium, and Cǎrpiniş. These villages were part of the Zlatna Treasury Estate (Hung: zalatnai kincstári uradalom); at the time they were involved in a dispute with their landlord involving his unwillingness to pay them their part of the gold mines' income. The inhabitants of the three villages entrusted Katalin with their case, and from this moment their interests became her own.
After Katalin moved to Bucium, she prepared a petition which she herself signed and brought to Vienna. It outlined the complaints of the three villages: harassment by the officers; an increase in forced labor; and a general breaking of the villagers' privileges. In January 1841 the petition came before the ruler; in 1842 the comitatus did send a fact-finding commission, but regarding a separate matter: the illegal use of the forest by the villagers. The representative, Deputy-Lieutenant Menyhért Fosztó, ruled against the villagers. In his report, he concluded that "the reason for the villagers' restlessness [was that they were being] incited by certain well-paid writers and officials, who profit from this trouble-making." In response to this, Katalin Varga advised the villagers to continue using as much wood as they wanted for their homes and furnaces, and to chase away the forest rangers. Presumably they did, and predictably in March 1843 the Royal Chancery reopened the case.
While the case was continuing, on May 6, 1843 a group of villagers of Detunata, led by Katalin, armed themselves with staffs and axes and marched against the government officials who had begun planting trees on the villagers' lands. In the end no one was harmed, but the villagers destroyed the saplings. This time around Deputy-Lieutenant Fosztó decided in favor of both the 1841 petition and on the side of the Detunata villagers. The Treasury however was discontented with this, and labeled Katalin Varga a "dangerous rebel" and a "deceiver". This marks the beginning of several unsuccessful attempts on the part of the comitatus to capture Katalin.
Beginning with the 18th century, there had been an ongoing effort to convert the local Romanian populace from Orthodox to Greek Catholic. Under the guise of this effort, Vienna tried to pacify the peasants by giving 1000 forints for the construction of a new Greek Catholic parish in Bucium. On April 25, 1845, when work should have already begun, the locals rose up against it in the belief that the building was a government office. Dumitru Nicoară and others tried to prevent with pitchforks the construction, claiming that the land belonged to the peasants. Vienna assumed that the instigator of the problems was Katalin Varga. She was no longer allowed to travel to Vienna and many of her newer petitions were rejected outright.
On March 9, 1845, Katalin gave a speech in front of the Abrud-Sat church in which she spoke out against the government officials who continued cutting wood from the villages' forests. She also enlisted the help of local lawyer Sámuel Szakács Mikes to deal with new government restrictions on alcoholic drinks. Because of her rapidly growing influence, pressure was put on Deputy-Lieutenant Fosztó, who began speaking with and trying to advise the villagers personally, with only minor successes. In Bucium, Katalin Varga and 50 followers armed with staffs went to the courtyard of judge Ion Pleşa Danciu; their demands of an explanation about their tax moneys resulted in a minor scuffle. Reports about these events named Katalin Varga guilty of inciting them all, and the Treasury continued to press for her capture.
On August 10, 1846, at the news of a peasant uprising in Galicia, Chancellor Baron Sámuel Jósika and Governor-general Count József Teleky requested military aid from General Anton Freiherr von Puchner. In light to this situation, Katalin Varga personally took a petition to Vienna in which she admitted to the faults in some of her and the villages' actions, asked pardon for their mistakes, and thanked the court for their continued patience in the matter, but also restated the problems of the villages, which had still not been solved. The petition also contained a separate letter from the three villages, in which they took on responsibility for Katalin Varga's actions and thereby legitimized her safe-passage to Vienna. They further requested an independent examination of the issues at the expense of the villages, and that all military intervention should cease until after the examination had concluded. Chancellor Jósika, who feared outright rebellion in the country, suspended military actions and asked for the assistance of Andrei Şaguna, who had been named vicar on June 27, 1846.
The authorities were not pleased with these claims, and took action to imprison Katalin Varga as the instigator. With the assistance of resident bishop Şaguna, she was arrested on trumped-up charges in January 1847. First she was held in the prison at Aiud, and then at Alba Iulia, where she was held for nearly four years without judgment.
The trial finally took place in 1851, with a sentence of three months given. After serving her time, Katalin was exiled to the village of her birth, Hălmeag. It is assumed that she lived out the remainder of her life there, and died sometime after 1852.
In 1977, the villagers in Hălmeag erected a monument to Katalin Varga in the courtyard of the local church. During the communist era, the Hălmeag collective farm was named after her. In 1951, the Secondary School for Girls in Szolnok, Hungary, adopted the name "Varga Katalin Secondary School", which it retains to this day. Also, in Romania, several streets are named Ecaterina Varga, the Romanian form of her name.