Ryder was born in Olmstead County near Winona, Minnesota to Cindy Istas and Michael Horowitz, the son of Jewish immigrants from Russia and Romania.

At 13 she had a video audition to the film Desert Bloom (1986), but didn't get the part. Director David Seltzer, however, spotted her and cast her in Lucas (1986).

Ryder broke into the public consciousness with her portrayal of Lydia, a depressed goth living in haunted house with her parents in Tim Burton's Beetlejuice (1988). Alienation would be a motif of her career, but she hinted at greater range as the radiant Kim in Edward Scissorhands (1990), another Burton project. The role paired her with Johnny Depp. The two became a couple and Depp expressed his dedication with a tattoo proclaiming "Winona Forever."

Ryder was selected for the part of Mary Corleone in The Godfather: Part III (1990), but had to drop out of the role after catching the flu from the strain of doing the films Welcome Home, Roxy Carmichael (1990) and Mermaids (1990) back to back. She said she didn't want to let everyone down by doing a substandard performance. She later made The Age of Innocence (1993) which was directed by Martin Scorsese, who she believes to be "the best director in the world".

She would go on to work opposite such talents as Robin Williams and Jack Nicholson, but it was her work with director Gregory Nava, who directed her in My Family, Mi Familia, that would lead her to the role that would make her a star.

Alien Resurrection (1997), was skewered by critics and failed to build on the success of the franchise. Ryder has twice had to drop out of productions due to poor health, an ominous sign for an actress so young. Her labyrinthine love life has been a gold mine for the tabloid writers and the notoriety has sometimes obscured the quality of her work.

On 12 December 2001 Ryder was arrested and charged with shoplifting from a Saks Fifth Avenue store in Beverly Hills; after a trial the next year, she was found guilty of felony grand theft and vandalism, and sentenced to three years' probation, fines and 480 hours of community service time.