She is the daughter of the renowned literary, radio, and television personality Clifton Fadiman and World War II correspondent and author Annalee Jacoby Fadiman. She attended Harvard University, graduating in 1975 from Radcliffe College with a bachelor of arts degree. At Harvard, she roomed with Wendy Lesser (Benazir Bhutto and Kathleen Kennedy were also in the same dorm).
Fadiman's 1997 book The Spirit Catches You and You Fall Down: A Hmong Child, Her American Doctors, and the Collision of Two Cultures won the 1997 National Book Critics Circle Award as well as the Los Angeles Times Book Prize for Current Interest, and the Salon Book Award. Researched in a small county hospital in California, it examined a Hmong family from Laos with a child with epilepsy, and their cultural, linguistic, and medical struggles with the American medical system.
She has authored two books of essays, Ex Libris: Confessions of a Common Reader (1998) and At Large and At Small: Familiar Essays (2007), a collection of essays on Samuel Taylor Coleridge, postal history, and ice cream, among other topics; it was the source of an unencrypted quotation in the New York Times Sunday Acrostic. She also edited Rereadings: Seventeen Writers Revisit Books They Love (2005) and the Best American Essays 2003 (2003).
Fadiman has published a memoir about her relationship with her father, The Wine Lover's Daughter (2017).
Fadiman was a founding editor of the Library of Congress magazine Civilization.
She was the fourth editor of the Phi Beta Kappa quarterly The American Scholar since 1997, and under her direction, it won three National Magazine Awards in six years. She left The American Scholar, where she was paid an annual salary of $60,000, in 2004, in the midst of a dispute over budgetary issues. At the time of her departure the journal faced a budget deficit of about $250,000 and a circulation of about 28,000.
Since January 2005, in a program established by Yale alumnus Paul E. Francis, Anne Fadiman has been Yale University's first Francis Writer in Residence, a position that allows her to teach one or two non-fiction writing seminars each year, and advise, mentor, and interact with students and editors of undergraduate publications.