Perabo was born in Dallas, Texas, on October 31, 1976 and grew up in Toms River, New Jersey, the daughter of Mary Charlotte, a physical therapist, and George William Perabo, a poetry professor at Ocean County College. She is of Portuguese and Norwegian descent. Her parents chose to name her after actress Piper Laurie. Her brothers, Noah and Adam, are also actors. In high school, Perabo appeared in the annual musicals, was president of the National Honor Society and the editor of the school literary magazine, Polaris.

She graduated from high school at Toms River High School North and then from Ohio University's Honors Tutorial College in 1998 with a BFA in theater. After graduating, Piper studied acting at the LaMama Theater in New York and had small roles in two plays. She was a waitress in New York City at an upscale restaurant prior to being discovered. Perabo enjoys classical music, literature and fishing. Piper is close friends with actress Lena Headey, her co-star in The Cave and Imagine Me & You.

In 2000, Perabo was cast in The Adventures of Rocky and Bullwinkle as lead character FBI agent Karen Sympathy. Her following role in Coyote Ugly brought her into the public eye. She played the role of Violet Sanford, a.k.a. "Jersey," a young woman who moves to New York to pursue her dream of becoming a songwriter. She had to take lessons in voice, guitar, piano and bartending to prepare for the role. Despite poor reviews, the film was a modest box-office success and she won an MTV Movie Award for Best Music Moment for "One Way or Another."

In 2001, Perabo starred in an independent Canadian movie called Lost and Delirious_(2001), playing a boarding school student who falls in love with a female classmate. The next year she starred as a French exchange student in Slap Her... She's French, which was shelved in North America for two years, then released under the new title She Gets What She Wants. The film was released under its original title in Europe. In 2003, she had a role as the eldest Baker child, Nora, in Cheaper By The Dozen (2003) which she reprised in its 2005 sequel.

Other recent films include The i Inside (2003), Perfect Opposites (2004), George and the Dragon (2004), The Cave (2005), Edison (2005), and The Prestige (2006). She has also appeared as a nutritionist on the Fox TV show House.