Wilson was born as Margarita Ibrahimoff in Los Angeles, California. Her father, a Pomak who worked at a racetrack, was born in Greece. Before immigrating to the USA he had lived in Bulgaria and Turkey; her mother, Dorothy, was born and raised in a Greek village on the Albanian border. Wilson's family changed their surname from "Ibrahimoff" to "Wilson", which was a name of a local street in Southern California. She has been married to Tom Hanks since April 1988, and has two children. She contributed to the Moffitt Cancer Center by donating "True Hearts" jewelry made of sterling silver and 14k gold. The proceeds will benefit several charities. Wilson credits good friend Rosie O'Donnell as inspiration for her charitable work, particuarly with cancer and childrens charities.

Wilson is often credited with being the driving force behind Nia Vardalos's movie deal for My Big Fat Greek Wedding, which became the highest-grossing independent film of all time.

She has had recurring roles in various television series, and appeared in several movies. These include Midnight Caller, Volunteers, Teen Witch, The Bonfire of the Vanities, Barbarians at the Gate, Sleepless in Seattle, Now and Then, That Thing You Do!, Frasier, Jingle All the Way, Runaway Bride, and Raise Your Voice.