Etheridge was born in Leavenworth, Kansas. She attended Berklee College of Music in Boston for three semesters in 1979 and 1980 and was friends with fellow student Lauren Passarelli, now a guitar professor at Berklee.
In October 2004, Melissa Etheridge was diagnosed with breast cancer. At the 2005 Grammy Awards, she made a return to the stage and, although bald from chemotherapy, performed a tribute to Janis Joplin with the song "Piece of My Heart". Etheridge was praised for her performance, which was considered one of the highlights of the show.
On November 15, 2005, Etheridge appeared on the Tonight Show to perform her song "I Run for Life", which references her own fight with breast cancer and her determination to overcome it, and seeks to encourage other breast cancer survivors and their families. After her performance Jay Leno told her, "Thanks for being a fighter, kiddo".
Etheridge wrote the song "I Need to Wake Up" for the film documentary An Inconvenient Truth, which won the Academy Award for Best Original Song in 2006. The song was released only on the enhanced version of her greatest hits album, The Road Less Traveled.