Born and raised in Winnepeg, Vardalos was raised in a quirky and eccentric family that proudly embraced its Greek heritage and encouraged her creative energies early on. She began her professional career on stage at the local theater the Rainbow Stage and used her experience to earn a scholarship to Toronto's Ryerson University. She joined Toronto's famed Second City improvisational comedy theater troupe-well known as a training ground which produced a host of comedic talents, including John Candy and Martin Short-in an unconventional manner, taking a job in the box office where she dutifully watched every evening's production. One night an actress fell ill and had to be rushed to the hospital fifteen minutes before curtain before a sold-out house. Vardalos saved the day by convincing the producers she knew the show well enough to step into the part-which she did. Her success there led her to move to Chicago's even more acclaimed Second City theater, where she would ultimately win Chicago's Jeff Award for Best Actress.

Also in Chicago she met fellow Second City performer Ian Gomez and the two married and moved to Los Angeles in 1993 to further their careers. Gomez hit early with recurring roles on popular TV shows such as "The Drew Carey Show" and "Felicity" while Vardalos had a tougher time, toiling in tiny TV guest spots and small film appearances. Seeking to create her own vehicle and in need of a creative outlet, Vardalos began to pen a one-woman stage show to produce and perform in Los Angeles. Drawing upon her colorful relatives, the traditions of her powerfully ingrained heritage the humorous hysteria that surrounded her own nuptials to the non-Greek Gomez, she created a play that both affectionately skewered and celebrated her oddball upbringing, finishing the rapid-fire first draft of "My Big Fat Greek Wedding" in just two weeks. Developing it first at the HBO Workspace, Vardalos's show-in which she played ten characters-was staged in various L.A. theaters.

The stage incarnation (which she also fashioned into an unsold screenplay) was a modest hit in Los Angeles, and the play's sole piece of newspaper advertising happened to catch the eye of another woman who grew up in a traditional Greek family and married an outsider, actress Rita Wilson. Wilson attended, loved the show and returned for a second performance the next night, this time with her husband, actor Tom Hanks, in tow. The couple was duly charmed by and impressed with Vardalos, and Hanks quickly optioned her screenplay for his personal production company, Play-Tone, and agreed to keep her as the star. Meanwhile Vardalos' play was nominated for an Ovation Award for Best New Play in Los Angeles and also ran in Toronto and Montreal.

Even with the backing of one of Hollywood's most powerful actors, Vardalos had to weather much attempted studio tinkering with her screenplay, with executives trying variously to cast a more bankable star, re-work the script and even change the ethnicity of the family. The actress was able to stick to her guns and keep the central role of Toula, joining a talented ensemble of actors with TV director Joel Zwick at the helm. Made for under $5 million, "My Big Fat Greek Wedding" was released in April 2002 by HBO Independent Productions with little if any pre-release fanfare-including virtually no television advertising or billboards-yet somehow the film was able to attract an audience.

Positive word-of-mouth spread from people who saw the movie, and soon audiences were lining up-Vardalos' easily accessible comedy transcended its Greek label and appealed to a wide cross section of people, feeling funny and true to anyone who's had to deal with ethnic differences, eccentric relatives and even simply the often arduous task of getting married. By the summer of 2002 the breakout film, aided by the media embracing Vardalos' underdog success story and her connection to Wilson and Hanks, continued to open in more and more theaters and its box office numbers were suddenly challenging concurrent box office blockbusters like "Austin Powers: Goldmember" and "Signs." Its take escalated upwards of $230 million, making it the highest-grossing independent feature ever released.

Although she found herself auditioning for cheese commercials just prior to her film's release, Vardalos' career skyrocketed in the wake of the movie's grass-roots success. As a performer she was nominated for a Golden Globe for Best Actress in a Musical or Comedy, and as a writer she was nominated for an Academy Award for Best Original Screenplay. She inked a deal with CBS to bring the characters to television in the sitcom "My Big Fat Greek Life", where she stayed on as the lead (now re-named "Nia") and was joined by most of her co-stars (although her big-screen leading man John Corbett was unable to come along due to a prior series commitment). The series, which had actually been picked up for development prior to the film's release after a CBS executive happened to catch Vardalos' show at the Just for Laughs International Comedy Festival in Montreal, was revamped at the last minute to pick up where the film left off rather than re-tell the courtship story. She also sold a second feature film script, "Connie and Carla Do L.A." (2004) in which she and Toni Colette play working-class dinner theater singers who are forced to go undercover in LA as drag queens-with Hanks and Wilson again serving as producers.