Walker completed her high school education at Gilbert Academy in New Orleans, Louisiana, where her family had moved in 1925. She went on to attend New Orleans University (now Dillard University) for two years. Then, after acclaimed poet Langston Hughes recognized her talent and urged her to seek training in the North, she transferred to Northwestern University in Chicago, Illinois, where she received a B.A. in English in 1935, at the age of nineteen. In 1937, she published "For My People" in Poetry magazine. Her first poem to appear in print, “For My People” became one of her most famous works and was even anthologized in 1941 in The Negro Caravan.

In 1936, Walker took on full-time work with the Federal Writers' Project in Chicago under Franklin D. Roosevelt's Works Project Administration, befriending and collaborating with such noted artists as Gwendolyn Brooks, Katherine Dunham, and Frank Yerby. Perhaps the most memorable of these friendships was that with noted author Richard Wright whose texts Walker would later help to research and revise. In 1988, Walker wrote a book recalling that friendship, entitled Richard Wright, Daemonic Genius: A Portrait of the Man, a Critical Look at His Work. Involvement in the Writers' Project offered Walker a firsthand glimpse of the struggles of inner-city African Americans who were products of the Great Migration, a northward movement that had resulted in hard times and broken dreams for many southern black immigrants. During this time, Walker authored an urban novel, "Goose Island," which was never published.

After completing her tenure with the WPA in 1939, Walker returned to school, entering the Creative Writing Program at the University of Iowa, where she earned a Master of Arts degree in 1940 and, later, a Ph.D. in 1965. In 1941, Walker began teaching at Livingstone College in Salisbury, North Carolina. In 1942, she left for one year to teach at West Virginia State College. In that year, she also published her first volume of poems, For My People, with the title poem quickly becoming her signature piece and helping elevate her toward success. For this volume, which served as her Master's thesis at Iowa, she won the Yale Younger Poets Award.

In 1943, Walker married Firnist James Alexander, or "Alex," as she lovingly called him, an interior designer and decorator. In 1949, following the birth of their first three children (they had a total of four children), the couple moved to Jackson, Mississippi. Walker began a prosperous teaching career at Jackson State College in the same year, retiring from its English Department thirty years later in 1979. In 1968, she founded the Institute for the Study of History, Life, and Culture of Black People (now the Margaret Walker Alexander National Research Center). She directed the center until her retirement. During her tenure at Jackson State, Walker also organized and chaired the Phillis Wheatley Poetry Festival. Following retirement, she remained active as professor emerita until her death in the fall of 1998.

Jubilee, a neo-slave narrative based on the collected memories of the author’s maternal grandmother, Elvira Ware Dozier, was published in 1966, only a year after Walker completed the first version of it for her dissertation. Many scholars view the novel as an African American response to America's fascination with Gone With the Wind (1936). Others recognize the work as an example of the historic presence that the author commands as a prophet of sorts for her people. The novel has enjoyed tremendous popularity, winning the Houghton Mifflin Literary Award (1968), having been translated into seven languages, and having never gone out of print.

Walker followed Jubilee with Prophets for a New Day (1970), a poetic treatment of the historic civil rights struggle of blacks in America. It also celebrates the tradition of African American folktales and expression.