Marc Jacobs was born in New York City to Jewish American parents. He attended the High School of Art and Design in New York City and graduated in 1981.He lived in Teaneck, New Jersey with his mother, sister and younger brother, and attended Teaneck High School. At fifteen, Jacobs worked as a stockboy at Charivari, an avant-garde clothing boutique in New York City. From there, Jacobs entered Parsons The New School for Design in New York City. During his tenure at Parsons, Jacobs won the Perry Ellis Gold Thimble Award in 1984 and in the same year was also awarded the Chester Weinberg Gold Thimble Award and the Design Student of the Year Award.

While still at Parsons, Jacobs designed and sold his first line of hand-knit sweaters. He designed his first collection for Reuben Thomas, Inc., under the Sketchbook label. Following his studies at Parsons, Jacobs began to design at Perry Ellis after its founder had died. Jacobs became prominent on the fashion scene when he designed a "grunge" collection for Perry Ellis, leading to his dismissal in 1993. With Robert Duffy, Jacobs formed Jacobs Duffy Designs Inc., which continues to this day. In 1986, backed by Onward Kashiyama USA, Inc., Jacobs designed his first collection bearing the Marc Jacobs label. In 1987 Jacobs was the youngest designer to have ever been awarded the fashion industry's highest tribute, The Council of Fashion Designers of America (CFDA) Perry Ellis Award for New Fashion Talent.

Jacobs and Duffy joined the women's design unit of Tristan Russo in 1989 as Vice President and President, respectively. In addition, Jacobs oversaw the design of the various women's licensees. In 1992, the Council of Fashion Designers of America, once again bestowed Jacobs with a great honor: The Women's Designer of the Year Award. In 1994 he produced his first full collection of menswear.

Jacobs is a prominent fixture in the New York City celebrity scene, having become something of a celebrity himself. The audience for his fashion shows typically includes celebrities like Kim Gordon and Vincent Gallo. Most of his collections make references to the fashions of past decades from the forties to the eighties. Disputing the claim by the designer Oscar de la Renta that Jacobs is a mere copyist, the New York Times Critic Guy Trebay has written "unlike the many brand-name designers who promote the illusion that their output results from a single prodigious creativity, Mr. Jacobs makes no pretense that fashion emerges full blown from the head of one solitary genius". Explaining his clothes, Jacobs has said "what I prefer is that even if someone feels hedonistic, they don’t look it. Curiosity about sex is much more interesting to me than domination. ... My clothes are not hot. Never. Never.".

In May 2009, Jacobs hosted the 'Model and Muse' themed Metropolitan Museum of Art Costume Institute Gala in New York with supermodel Kate Moss.