Monica Lewinsky was born in San Francisco, California, and grew up in an affluent family in Southern California in the Westside Brentwood area of Los Angeles and in Beverly Hills. She is of Jewish descent. Her father is Bernhard Lewinsky, an oncologist, and her mother, Marcia Lewis, is an author; her parents' acrimonious separation and divorce during 1987 and 1988 had a significant effect on Monica. (Her father later married his wife Barbara; her mother later married R. Peter Straus, a media executive.) Growing up, the family attended Sinai Temple in Los Angeles and she attended Sinai Akiba Academy, its religious school. For her primary education she attended the John Thomas Dye School in Bel-Air. She then attended Beverly Hills High School, but for her senior year transferred to and graduated from Bel Air Prep (later known as Pacific Hills School) in 1991.

She attended two-year community college Santa Monica College, and worked for the drama department at Beverly Hills High School and at a tie shop. In 1993, she enrolled at Lewis & Clark College in Portland, Oregon, graduating with a psychology degree in 1995.

Taking advantage of a family connection, Lewinsky moved to Washington, D.C. to work at the White House as an unpaid summer intern starting in July 1995 in the office of White House Chief of Staff Leon Panetta. She moved to a paid position in the White House Office of Legislative Affairs in December 1995.

Between November 1995 and March 1997, Lewinsky had an intimate relationship with then President Bill Clinton. She later testified that the relationship involved fellatio in the Oval Office and other sexual contact, but that sexual intercourse did not occur.

Clinton had previously been confronted with allegations of sexual misconduct, most notably in regard to an alleged long-term relationship with singer Gennifer Flowers and an encounter with Arkansas state employee Paula Jones (née Corbin); these events were alleged to have occurred during Clinton's time as Governor of Arkansas. Paula Jones filed a civil lawsuit against Bill Clinton for sexual harassment. Lewinsky's name surfaced during legal proceedings connected to the latter allegation, when Jones' lawyers sought corroborating evidence of Clinton's conduct to substantiate her allegations.

In April 1996, Lewinsky's superiors relocated her job to The Pentagon because they felt she was spending too much time around Clinton. Lewinsky confided in a co-worker named Linda Tripp about her relationship with the President. Beginning in September 1997, Tripp began secretly recording their telephone conversations regarding the affair with Clinton. In January 1998, after Lewinsky had submitted an affidavit in the Paula Jones case denying any physical relationship with Clinton, and attempted to persuade Tripp to lie under oath in the Jones case, Tripp gave the tapes to Independent Counsel Kenneth Starr, and these tapes added to his ongoing investigation into the Whitewater controversy. Starr broadened his investigation to include investigating Lewinsky, Clinton, and others for possible perjury and subornation of perjury in the Jones case. Noteworthy for its revelation of Tripp's motivations was her reporting of their conversations to literary agent Lucianne Goldberg. Tripp also convinced Lewinsky to save the gifts that Clinton had given her during their affair, and not to dry clean what would later be known as "the blue dress."

While under oath, Clinton denied having had "a sexual affair," "sexual relations," or "a sexual relationship" with Lewinsky, and on January 26, 1998 claimed "I did not have sexual relations with that woman, Miss Lewinsky" in a nationally televised White House news conference.

Clinton also said, "there is not a sexual relationship, an improper sexual relationship or any other kind of improper relationship" which he defended as truthful on August 17, 1998, hearing because of the use of the present tense, famously arguing "it depends on what the meaning of the word 'is' is" (i.e., he was not, at the time he made that statement, still having a sexual relationship with Lewinsky). Under pressure from Starr, who had obtained from Lewinsky a blue dress with Clinton's semen stain, as well as testimony from Lewinsky that the President had inserted a cigar tube into her vagina, Clinton stated, "I did have a relationship with Miss Lewinsky that was not appropriate." Clinton denied having committed perjury because, according to Clinton, the legal definition of oral sex was not encompassed by "sex" per se. In addition, relying upon the definition of "sexual relations" as proposed by the prosecution and agreed by the defense and by Judge Susan Webber Wright, who was hearing the Paula Jones case, Clinton claimed that because certain acts were performed on him, not by him, he did not engage in sexual relations. Lewinsky's testimony to the Starr Commission, however, contradicted Clinton's claim of being totally passive in their encounters.

Both Clinton and Lewinsky were called before a grand jury; Clinton testified via closed-circuit television, Lewinsky in person. Given an opportunity to offer final words on the matter, Lewinsky told the jury, "I hate Linda Tripp."

The affair led to a period of pop culture celebrity for Lewinsky as a younger-generation focus of a political storm. In early 1999, Lewinsky declined to sign an autograph in an airport, saying, "I'm kind of known for something that's not so great to be known for."