McDonald was born February 28, 1959, in Pittsburgh, Pennsylvania, to John and Mary Louise McDonald. She is the youngest of five girls, which served as the inspiration for The Sister's Club. She was awarded a B.A. from Oberlin College in 1981, and an M.L.S. from University of Pittsburgh in 1985.
She began her career as a children's librarian, working at Carnegie Library of Pittsburgh, Minneapolis Public Library, and Adams Memorial Library in Latrobe, Pennsylvania. Her first book, Is This a House for Hermit Crab?, came as a result of patrons asking her where to find a story she had told to children at a library. McDonald is married to Richard Haynes and lives in Sebastopol, California.