DiFranco was born in Buffalo, New York, to Elizabeth and Dante DiFranco, who had met while attending MIT. She started playing Beatles covers at local bars and busking with her guitar teacher, Michael Meldrum, at the age of nine.
In 1989, DiFranco started her own record company, Righteous Records. Early in her career DiFranco worked with manager Dale Anderson, a writer for the Buffalo News, who started another record label called Hot Wings Records, after the two parted ways, that released similar sounding material. Her self-titled debut album was issued on the label in the winter of 1990. Later, she relocated to New York City, where she took poetry classes at The New School and toured vigorously for the next 15 years, essentially pausing briefly only to record albums.
Righteous Records was renamed Righteous Babe Records in 1994.
In 1998, DiFranco's drummer, Andy Stochansky, left the band to pursue a solo career as a singer-songwriter. Their rapport during live shows is showcased on the 1997 album Living in Clip.
In 2002 her rendition of Greg Brown's "The Poet Game" appeared on Going Driftless: An Artists' Tribute to Greg Brown.
Her father died early in the summer of 2004. In July 2005, DiFranco developed tendonitis and took a hiatus from touring. Her 2005 tour concluded with an appearance at the FloydFest World Music and Genre Crossover festival in Floyd, Virginia. She returned to touring in late April 2006, including a performance at the New Orleans Jazz & Heritage Festival on April 28 and a performance at the Calgary Folk Music Festival on July 30, 2006.
In 2005 she collaborated with fellow folk singer Dar Williams on "Comfortably Numb", a Pink Floyd cover song from Williams' album My Better Self.
DiFranco's album Reprieve was released on August 8, 2006. It was previously leaked on iTunes for several hours around July 1, 2006, due to an error saying it was released in 2002. DiFranco performed with Cyndi Lauper on "Sisters of Avalon", a track from Lauper's 2005 collection The Body Acoustic.
On September 11, 2007, she released the first retrospective of her career, titled Canon and for the first time, a collection of poetry in a book titled Verses.
Red Letter Year was released on September 30, 2008. Says DiFranco about the album:
"When I listen to my new record, I hear a very relaxed me, which I think has been absent in a lot of my recorded canon. Now I feel like I’m in a really good place. My partner Mike Napolitano co-produced this record - my guitar and voice have never sounded better, and that’s because of him. I’ve got this great band and crew. And my baby, she teaches me how to just be in my skin, to do less and be more."
DiFranco performed a live webcast from Ex'pression College for Digital Arts on June 24, 2010. She debuted a selection of new material, including the songs "Which Side Are You On?" (a reworking of the Florence Reece song with different lyrics penned by DiFranco), "Life Boat", "Unworry", "Promiscuity", "Splinter", "Amendment", "See See..." and "Hearse".
In 2010, DiFranco sued hip-hop horrorcore artist Necro for sampling her song, "Used to You" in a response track called "The Asshole Anthem" on his DIE! album. Due to the lawsuit, the album was reissued without the track.
She has continued touring through 2011. As of 2008 her backing band consists of Todd Sickafoose on upright bass, Allison Miller on drums, and Mike Dillon on percussion and vibes. DiFranco returned to the Calgary Folk Music Festival in July 2008.
She is also a poet and has been featured on Def Jam's poetry hour.
DiFranco released an album of new material on January 17, 2012, titled "Â¿Which Side Are You On?". It includes collaborations with Pete Seeger, Ivan Neville, Cyril Neville, Skerik, Adam Levy, Righteous Babe recording artist Anaïs Mitchell, CC Adcock, and a host of New Orleans-based horn players known for their work in such outfits as Galactic, Bonerama, and Rebirth Brass Band.
She and her husband currently reside in the Bywater neighborhood of New Orleans.