O'Hara was born in Toronto, Ontario to a large family of Irish Catholic descent. She is the sister of comedic actress Catherine O'Hara. Her early musical tastes included Van Morrison, Dinah Washington, and her father's jazz records. She was a student at the Ontario College of Art and Design in the 1970s and was involved in the music scene as a member of Toronto bands Dollars, Songship and Go Deo Chorus.
In 1983, O'Hara left Go Deo and was signed by Virgin Records. Andy Partridge of XTC was scheduled as her producer but was fired after his first day due to his reported difficulties with O'Hara's musical approach. Her contract with Virgin continued and eventually led to the 1988 release of Miss America. O'Hara later reflected on the production experience, noting "I loved the Celtic crosses and the sheep rolling around the hills by the studio in Wales. But for Virgin to go from, 'You can do whatever you want', to 'What have you done?'—that was tough."
In addition, she did some work as a graphic artist, including lettering for the cover of Dalbello's album whomanfoursays.
In 1987, Michael Brook saw O'Hara in performance and was captivated by her unique style and soon took on the job of producing O'Hara's attempts at an album. He ultimately added new vocals to and remixed material that was originally recorded by Joe Boyd in 1984. At least one of the songs, "To Cry About", had been written as early as 1980. According to the liner notes of a later reissue, six of the tracks were recorded in 1984, four in 1988, and one in 1983 and mixed later.
On their 1990 album The Caution Horses, the Cowboy Junkies recorded a sparse, haunting version of O'Hara's song "You Will Be Loved Again". In 1991, O'Hara followed up with a four-song EP of Christmas material. Following the Christmas EP, O'Hara took on several acting roles and appeared as a vocalist on recordings by a variety of other artists, including Morrissey ("November Spawned a Monster"), John & Mary, Bruce Cockburn, Holly Cole, Bob Wiseman, Meryn Cadell, The Henrys and Neko Case. She performed Dark, Dear Heart at John Candy's funeral in March, 1994. She also contributed songs to a number of compilation albums, including tributes to Vic Chesnutt and Kurt Weill, and participated in a 1994 Christmas concert with Holly Cole, Rebecca Jenkins, Jane Siberry and Victoria Williams, which was released as the album Count Your Blessings. As well, she has occasionally performed in musical theatre, most notably productions of Tom Waits' experimental rock opera The Black Rider, stealing the show according to Pitchfork.com.
During an R.E.M. concert in Toronto in 1999, Michael Stipe brought O'Hara on stage and declared her a "national treasure" . Other artists who are said to be fans include Kristin Hersh, Radiohead, Dave Matthews and Rickie Lee Jones. However, she did not release a new recording under her own name until 2001, when she and longtime guitarist Rusty McCarthy contributed to the soundtrack for the Canadian film Apartment Hunting (in which she also acted).
On October 4 and 5, 2006, O'Hara performed Leonard Cohen's "Hallelujah" (with Gavin Friday) and "The Window" at "Came So Far For Beauty" the Leonard Cohen Tribute organised by Hal Willner at The Point Theatre in Dublin, Ireland. She performed at the All Tomorrow's Parties festival in Minehead, England, over the weekend of April 27 to 29, 2007, and with Howe Gelb and friends at the Barbican Centre in London on May 2, 2007.
O'Hara also performed at Toronto's Canwest Cabaret Festival in both 2008 and 2009. In 2008, she performed at tribute shows to Cohen, Weill and Duke Ellington, and in 2009, she participated in a musical improvisation show with Michael Snow and Aidan Closs. She also gave a rare radio interview to promote the 2009 show, appearing on CBC Radio One's Q on October 28 — and performing an impromptu duet of "Baby, It's Cold Outside" with host Jian Ghomeshi.
O'Hara sings the theme song for Someone Knows Something, a true-crime podcast from the CBC. The song was written by Bob Wiseman.
O'Hara sang backup vocals for Morrissey on his song, "November Spawned a Monster". She also contributed to four albums by Bob Wiseman: In Her Dream, Accidentally Acquired Beliefs, Theme and Variations, and Giulietta Masina At The Oscars Crying. She also contributed to Justin Rutledge's album No Never Alone. She also recorded a duet with Tindersticks called Peanuts which appeared on their 2010 album Falling Down A Mountain.
O'Hara has also made several small film appearances, most notably with Tom Waits in Candy Mountain (1986).
On May 15, 2009 in Toronto, Will Oldham brought her on stage to perform a cover of "In Spite of Ourselves" by John Prine.
Musician Steve Adey recorded a song entitled "Mary Margaret O'Hara" on his 2006 LP, All Things Real.Miss America (1988)
Apartment Hunting (2001)
Christmas EP (1991)
John & Mary, The Weedkiller's Daughter (1993) - background vocals
Count Your Blessings (1994) - collaborative concert with Jane Siberry, Holly Cole, Rebecca Jenkins and Victoria Williams
Songs for My Mother and Father (1996) - guest vocal on Hugh Marsh album
Sweet Relief II: Gravity of the Situation (1996) - "Florida"
September Songs – The Music of Kurt Weill (1997) - "Fürchte Dich Nicht"
O'Hara participated in some concerts of Hal Wilner's Harry Smith Project Revisited tour during 1999-2001. On the concert album, released in 2006, she performs the folk song "He Got Better Things for You" and on the accompanying DVD she can also be seen singing backing vocals to Gavin Friday's version of "When That Great Ship Went Down".
Stormy Weather: The Music of Harold Arlen (2003) - "Blues in the Night"
Dark Was the Night: A Tribute to the Music of Blind Willie Johnson (2004) – "God Moves on the Water"
Rogue's Gallery: Pirate Ballads, Sea Songs, and Chanteys (2006) - "The Cry of Man"
Tindersticks, Falling Down a Mountain (2010) - Guest vocal on "Peanuts"
Garth Hudson Presents: A Canadian Celebration of The Band (2010) - "Out of the Blue"
Blackie and the Rodeo Kings, Kings and Queens (2011) - "Heart A Mine"
Son of Rogues Gallery: Pirate Ballads, Sea Songs & Chanteys (2013) - "Then Said the Captain to Me (Two Poems of the Sea)"
The Hidden Cameras, Age (2014) - Guest vocals on "Gay Goth Scene"