Trachtenberg was born in New York City. Her father, Michael Trachtenberg, is a fiberoptics engineer, and her Russian-born mother, Lana, is a former actress turned puppeteer. Trachtenberg is of Jewish heritage and can speak Russian fluently. She was raised, along with older sister Irene, in Sheepshead Bay in Brooklyn.

Trachtenberg had her first television appearance in 1988 in a commercial for Wisk Detergent. She went on to feature in over 100 more commercials. Her first credited role came in 1993. She played Nona F. Mecklenberg in The Adventures of Pete & Pete from 1994 until 1996. During the same period she played the second Lily Montgomery in All My Children. It was on All My Children that Trachtenberg first worked with future Buffy co-star, Sarah Michelle Gellar.

Trachtenberg's film career began in 1996 with the lead role in Harriet the Spy. She then returned to television for Meego, for which she won a Young Artist Award. She returned to film in 1999 for Inspector Gadget, as the gadget-master's niece, Penny. She also starred in the film Can't Be Heaven.

In the summer of 2000, Trachtenberg took up the role of Dawn Summers in Buffy the Vampire Slayer. She remained in the role until the show ended in 2003. Since Buffy, she has returned to film, with the recent Eurotrip, co-starring Scott Mechlowicz and Travis Wester and directed by Jeff Schaffer. She also had a recurring role in the HBO series Six Feet Under as Celeste, a spoiled pop star for whom Keith Charles serves as a bodyguard.

Her latest role in a feature film came March of 2005, where she played the title character in Walt Disney Pictures' family comedy/drama Ice Princess with Kim Cattrall. In this film, Trachtenberg plays a science whiz named Casey Carlyle who gives up her future academic life in order to chase her lifelong dream of being a professional figure skater.