Born in St. John's, Newfoundland, Mary Walsh's first job in show business was working as a summer replacement radio announcer for the CBC. Through that position, she was offered a part in a local play and then joined the Newfoundland Travelling Theatre Company (NTTC), where she worked with Andy Jones, Cathy Jones, Tommy Sexton, Greg Malone, Robert Joy and Diane Olsen.

Afterwards, she moved to Toronto to take acting at Ryerson, then joined her former NTTC collaborators in a play called Cod on a Stick performed at Toronto's Theatre Passe Muraille. The play was such a hit that CBC brought them back to St. John's to record it for radio in 1974. They then named their company Codco (for Cod Company) and toured nationally, and internationally until 1976.

Walsh made her TV debut in 1977 writing and starring in the CBC miniseries The Root Seller. In 1979, Walsh starred in the CBC miniseries Up at Ours. In 1981, she joined The Wonderful Grand Band, both on television, and on a national tour. In 1986, Walsh and the other members of Codco wrote and starred in their own self-titled series on CBC. During this time, Walsh was also the artistic director for the Resource Centre for the Arts, directing, and appearing in such hugely popular collective creations as Terras de Bacchalau, Makin’ Time with the Yanks… As well as making the occasional film appearance, including Mike Jones' Secret Nation, for which she won Best Supporting Actress at the 1992 Atlantic Film Festival.

In 1992 Walsh created a new show called This Hour Has 22 Minutes for Salter Street Films and the CBC. A satirical take on current affairs, it was a big hit within Canada. Since its 1992 debut, it has not been off the air, winning numerous Gemini and Canadian Comedy awards. Walsh has also won two Gemini awards (one for writing, one for performance) for her new series, Hatching, Matching and Dispatching, which debuted in 2005. Having appeared in many feature films such as New Waterford Girl (1999, for which she received a Genie nomination), Violet (2000), Mambo italiano (2003) and Geraldine's Fortune (2004), Walsh decided to step behind the camera with a script she'd co-written-the dark comedy Young Triffie (2007). Walsh also appears in the film as Millie Bishop. In 2009 she starred in Crackie which garnered her another Genie nomination. Walsh appears in The Grand Seduction starring Brendan Gleeson now filming in 2012.

Walsh has been ubiquitous on Canadian television including numerous recent appearances on This Hour Has 22 Minutes, that recently included one that caused a sensation when she ambushed the Mayor of Toronto Rob Ford. She has appeared diversely in both drama and comedy in such series as the award winning Hatching, Matching and Dispatching that she both wrote and starred in, Mary Walsh: Open Book, DaVinci: The Quality of Life, and as a guest star on the 300th episode of Royal Canadian Air Farce (as Marg Delahunty), Murdoch Mysteries, The Wind In The Willows for Masterpiece Theatre on the BBC, the very first episode of The Republic Of Doyle as Miranda Cahill, The Duchess of George Street and many more.

Walsh has honorary degrees from Memorial University of Newfoundland, Trent University, McGill University, University of Prince Edward Island, and Mount Saint Vincent University. She was made a Member of the Order of Canada in 2000 and in 2012 she received a Governor General's Performing Arts Awards for Lifetime Artistic Achievement.