The daughter of a casting agent, Ryan was born Margaret Mary Emily Anna Hyra in Fairfield, Connecticut on November 19, 1961. She was called "Peggy" and later "Meg" as a child. Her father, Harry, was a high school math teacher and coach. Raised in New York, she went on to study journalism at New York University. In need of money to pay for her night classes, Ryan turned to acting to raise some extra cash.

With her mother's help, she landed a role on a short-lived television series, and then made her film debut in Rich and Famous. A lucky break led to her being cast in the daytime drama As the World Turns, on which she performed from 1982 until 1984. The film which thrust her into the limelight was TOP GUN, in which she played the wife of Tom Cruise's best friend. Her first lead role was in the hit move, WHEN HARRY MET SALLY. following year, she starred opposite Tom Hanks in Joe Versus the Volcano.

Before she next appeared onscreen with Hanks, Ryan took an uncharacteristic turn towards the purely dramatic, playing Jim Morrison's drug-addicted wife Pamela in Oliver Stone's The Doors (1991). She received wide critical praise for her portrayal, proving that she was capable of extending her range beyond light comedy.

2000 saw Ryan return to comedy, starring alongside Lisa Kudrow and Diane Keaton in Keaton's Hanging Up and also serving as the producer of the supernatural thriller Lost Souls. However, it was Ryan's offscreen activities that same year that truly aroused the public's notice and allowed her to break away from her perky, girl-next-door persona.