Wendy Wasserstein was born in New York City on October 18, 1950. Her family lived in Brooklyn until she was 12 and then moved to Manhattan. She graduated from Mount Holyoke with a degree in history in 1971, studied creative writing at City College, and earned a masters degree in fine arts in 1976 from the Yale School of Drama where she studied playwriting.

Her first play, Any Woman Can't appeared as a small off-Broadway production in 1973. Uncommon Women and Others was produced in 1977; it established Wasserstein as an important and popular playwright and featured Glenn Close and Swoosie Kurtz; Meryl Streep appeared in a televised PBS version of the play. Wasserstein's most acclaimed play was The Heidi Chronicles, produced on Broadway in 1989 after an Off Broadway run: it received the Tony and New York Drama Critics Circle awards for best play and the Pulitizer Prize for drama. The Sisters Rosensweig opened on Broadway in 1993.

While Wasserstein was known and worked mainly as a playwright, she also wrote for television and film and published a number of books, including Bachelor Girls (1990), Shiksa Goddess: (Or, How I Spent My Forties) (2001), and Sloth: The Seven Deadly Sins (2005). She also wrote a children's book, Pamela's First Musical (1996). Her first novel, Elements of Style, will be published in April 2006. Her other dramatic productions included Isn't it Romantic (1983), Old Money (2000), and An American Daughter (1997). Her latest play, Third, was staged this past fall at Lincoln Center. Wasserstein's daughter Lucy Jane was born in 1999.

She died in New York City on January 30, 2006.