When she began kindergarten in Kingston, Rhode Island, Lahiri’s teacher decided to call her by her pet name, Jhumpa, because it was easier to pronounce than her “proper name”. Lahiri recalled, “I always felt so embarrassed by my name…. You feel like you’re causing someone pain just by being who you are.” Lahiri’s ambivalence over her identity was the inspiration for the ambivalence of Gogol, the protagonist of her novel The Namesake, over his unusual name. In an editorial in Newsweek, Lahiri claims that she has “felt intense pressure to be two things, loyal to the old world and fluent in the new.” Much of her experiences growing up as a child were marked by these two sides tugging away at one other. When she became an adult, she found that she was able to be part of these two dimensions without the embarrassment and struggle that she had when she was a child. Lahiri graduated from South Kingstown High School and received her B.A. in English literature from Barnard College of Columbia University in 1989.

Lahiri then received multiple degrees from Boston University: an M.A. in English, an M.F.A. in Creative Writing, an M.A. in Comparative Literature, and a Ph.D. in Renaissance Studies. Her dissertation, completed in 1997, was entitled Accursed Palace: The Italian palazzo on the Jacobean stage (1603–1625). Her principal advisers were William Carroll (English) and Hellmut Wohl (Art History). She took a fellowship at Provincetown’s Fine Arts Work Center, which lasted for the next two years (1997–1998). Lahiri has taught creative writing at Boston University and the Rhode Island School of Design.

Lahiri’s early short stories faced rejection from publishers “for years”. Her debut short story collection, Interpreter of Maladies, was finally released in 1999. The stories address sensitive dilemmas in the lives of Indians or Indian immigrants, with themes such as marital difficulties, the bereavement over a stillborn child, and the disconnection between first and second generation United States immigrants. Lahiri later wrote, “When I first started writing I was not conscious that my subject was the Indian-American experience. What drew me to my craft was the desire to force the two worlds I occupied to mingle on the page as I was not brave enough, or mature enough, to allow in life.” The collection was praised by American critics, but received mixed reviews in India, where reviewers were alternately enthusiastic and upset Lahiri had “not paint[ed] Indians in a more positive light.” Interpreter of Maladies sold 600,000 copies and received the 2000 Pulitzer Prize for Fiction (only the seventh time a story collection had won the award).

In 2001, Lahiri married Alberto Vourvoulias-Bush, a journalist who was then deputy editor of TIME Latin America, and who is now senior editor of TIME Latin America. Lahiri lives in Rome with her husband and their two children, Octavio (b. 2002) and Noor (b. 2005). Lahiri joined the Princeton University faculty on July 1, 2015 as a professor of creative writing in the Lewis Center for the Arts.

In 2003, Lahiri published her first novel, The Namesake. The theme and plot of this story was influenced in part by a family story she heard growing up. Her father’s cousin was involved in a train wreck and was only saved when the workers saw a beam of light reflected off of a watch he was wearing. Similarly, the protagonist’s father in The Namesake was rescued due to his peers recognizing the books that he read by Russian author Nikolai Gogol. The father and his wife immigrated to the United States as young adults. After this life-changing experience, he named his son Gogol and his daughter Sonia. Together the two children grow up in a culture with different mannerisms and customs that clash with what their parents have taught them. A film adaptation of The Namesake was released in March 2007, directed by Mira Nair and starring Kal Penn as Gogol and Bollywood stars Tabu and Irrfan Khan as his parents. Lahiri herself made a cameo as “Aunt Jhumpa”.

Since 2005, Lahiri has been a vice president of the PEN American Center, an organization designed to promote friendship and intellectual cooperation among writers.

Lahiri’s second collection of short stories, Unaccustomed Earth, was released on April 1, 2008. Upon its publication, Unaccustomed Earth achieved the rare distinction of debuting at number 1 on The New York Times best seller list. New York Times Book Review editor, Dwight Garner, stated, “It’s hard to remember the last genuinely serious, well-written work of fiction—particularly a book of stories—that leapt straight to No. 1; it’s a powerful demonstration of Lahiri’s newfound commercial clout.”

In February 2010, she was appointed a member of the Committee on the Arts and Humanities, along with five others.

In September 2013, her novel The Lowland was placed on the shortlist for the Man Booker Prize, which ultimately went to The Luminaries by Eleanor Catton. The following month it was also long-listed for the National Book Award for Fiction, and revealed to be a finalist on October 16, 2013. However, on November 20, 2013, it lost out for that award to James McBride and his novel The Good Lord Bird.

In December 2015, Lahiri published a non-fiction essay called “Teach Yourself Italian” in The New Yorker about her experience learning Italian. In the essay she declared that she is now only writing in Italian, and the essay itself was translated from Italian to English.

In 2017, Lahiri receives the Pen/Malamud award for excellence in the short story. The award was established by the family of Pulitzer Prize-winning writer Bernard Malamud to honor excellence in the art of short fiction.

In 2018, Lahiri published the short story “The Boundary” in The New Yorker. The story explores the life of two families and the contrasting features between them.

Lahiri published her first novel in Italian called Dove mi trovo. In 2019, she compiled, edited and translated the Penguin Book of Italian Short Stories which consists of 40 Italian short stories written by 40 different Italian writers.