She was born in Lima, Peru to diplomat Tomás Allende, brother of Salvador Allende, who was president of Chile from 1970-73. In 1945, her parents separated, and her mother relocated with the three children to Chile, where they lived until 1953.
Later the family moved first to Bolivia and after that to Lebanon. While in Bolivia, Allende attended an American private school, and while in Lebanon a British private school in Beirut. She returned to Chile in 1958 to complete her secondary education, and there met her first husband, Miguel Frías, whom she married in 1962.
From 1959-65, Allende worked with the United Nations' FAO in Santiago, and later in Brussels, Belgium and elsewhere in Europe. Her daughter Paula was born in 1963. In 1966, Allende returned to Chile, and her son Nicolás was born there that year.
Beginning in 1967, she was on the editorial staff for Paula magazine, and from 1973 – 1974 for the children's magazine Mampato. She published two children's stories, "La abuela Panchita" and "Lauchas y Lauchones," as well as a collection of articles, Civilice a su troglodita. She also worked in Chilean television production for channels 7 and 13.
In 1973, Allende's play El embajador debuted in Santiago. That same year (September 11), her uncle was overthrown and killed in a violent coup. In 1975, Allende went into exile in Venezuela. While there, she worked for the newspaper El Nacional in Caracas and as a teacher in a secondary school.
In 1981, she learned that her grandfather, age 99, was on his deathbed. She started writing him a letter which later evolved into a book manuscript: The House of the Spirits. The book was a great success and was later made into a film (1993) by Danish director Bille August, starring Jeremy Irons, Meryl Streep, Winona Ryder, Glenn Close, and Antonio Banderas.
Allende's book Paula (1994) is a stirring memoir of her childhood in Santiago and her years in exile. It was written in the form of a letter to her daughter Paula, who lay in a coma in the hospital (she died of porphyria in 1992). Her other books include:
- The House of the Spirits (1982)
- La gorda de porcelana (1984)
- Of Love and Shadows (1984)
- Eva Luna (1987)
- The Stories of Eva Luna (1989)
- The Infinite Plan (1991)
- Afrodite (1997)
- Daughter of Fortune (1999).
- Portrait in Sepia (2000)
- My Invented Country (2003)