Folorunsho was born on 15 July 1951 to the family of Chief L. A. Ogbara in Ikorodu, Lagos State. She attended her nursery education at Our Ladies of Apostles, Lagos from 1955–1958. At age seven, she travelled to the United Kingdom to continue her primary education at Dinorben School for Girls in Hafodunos Hall in Llangernyw, Wales between 1959–1963. On completion of her primary education, she attended “Muslim High School” in Sagamu, Ogun State, Nigeria. She then returned to England for her secretarial studies at Pitman’s Central College, London.

Alakija started her career in 1974 as an executive secretary at Sijuade Enterprises, Lagos, Nigeria. She moved to the former First National Bank of Chicago, which later became FinBank now acquired by FCMB (First City Monument Bank) where she worked for some years before establishing a tailoring company called Supreme Stitches. Within a few years, as Rose of Sharon House of Fashion, it became a household name. As national president and lifelong trustee of the Fashion Designers Association of Nigeria (FADAN), she left an indelible mark, promoting Nigerian culture through fashion and style.

Folorunsho married a lawyer, Modupe Alakija of the Adeyemo Alakija family, in November 1976. They reside in Lagos, Nigeria, with their four sons and their grandchildren. Her nephew is DJ Xclusive. In June 2017, Folorunso’s son Folarin Alakija, married Iranian model Nazanin Jafarian Ghaissarifar in a wedding at Blenheim Palace in England. Media reports suggested the event was one of the world’s most expensive weddings.

In May 1993, Alakija applied for the allocation of an oil prospecting license (OPL). The license to explore for oil on a 617,000-acre block—now referred to as OPL 216—was granted to Alakija’s company, Famfa Limited. The block is approximately 350 kilometres (220 miles) southeast of Lagos and 110 kilometres (70 miles) offshore of Nigeria in the Agbami Field of the central Niger Delta. In September 1996, she entered into a joint venture agreement with Star Deep Water Petroleum Limited (a wholly owned subsidiary of Texaco) and appointed the company as a technical adviser for the exploration of the license, transferring 40 percent of her 100 percent stake to Star Deep.

As of 2014, she is listed as the 96th most powerful woman in the world by Forbes. In May 2015, two Nigerian women, Finance Minister Ngozi okonjo-Iweala and Alakija were listed among the world’s 100 most powerful women according to Forbes. Alakija was 86th on the list.