Schaal was born in Longmont, Colorado, to a Lutheran family of Dutch and German ancestry. She was raised on her family's cattle farm, in a rural area near Boulder. Her father is a construction worker and her mother is a secretary. Schaal has a brother, David, who is three years older than she is. She graduated from Northwestern University and then moved to New York to pursue a comedy career. Five years later in 2005, she had her first break when she was included in New York magazine's article "The Ten Funniest New Yorkers You've Never Heard Of".
In 2006, Schaal performed at the 2006 HBO US Comedy Arts Festival in Aspen where she won the award for "Best Alternative Comedian". She was also the winner of the second annual Andy Kaufman Award (hosted by the New York Comedy Festival), Best Female Stand-up at the 2006 Nightlife Awards in New York, and "Best Female Stand Up Comedian" at the 2007 ECNY Awards. At the 2008 Melbourne International Comedy Festival, she won the Barry Award for her show Kristen Schaal As You Have Probably Never Seen Her Before, tying with Nina Conti. Also in 2006, Schaal appeared on the first season of the Comedy Central show Live at Gotham. She co-hosts the weekly variety show Hot Tub in Los Angeles, which was voted “Best Variety Show of 2005” by Time-Out New York’s readers poll. She also performs at the Peoples Improv Theater on the improv team, "Big Black Car", which was awarded best improv troupe of 2005 at the Emerging Comics of New York awards. She is a founding member of the theatre company The Striking Viking Story Pirates, which adapts stories by children into sketches and songs.
Schaal performed live at the Edinburgh Fringe 2007 in Scotland, where she was one of six acts (chosen from over two hundred American productions at the Fringe) requested to perform at the US Consul General-sponsored "Fringe USA" Showcase.
On her return to the Edinburgh Fringe Festival in August 2008, Schaal was nominated for the If.comedy award for Kristen Schaal And Kurt Braunohler: Double Down Hearts.
Schaal has also performed at the Royal Albert Hall, London, as part of The Secret Policeman's Ball 2008 in aid of Amnesty International, and at the Bonnaroo 2009 music festival.
Schaal rose to national attention for her role on HBO's Flight of the Conchords as the stalker-fan Mel, a role which earned her an Ewwy nomination for Best Supporting Actress in a Comedy Series in 2009. She was also a credited consultant and writer for Season 11 of South Park, appeared on the BBC's Never Mind the Buzzcocks as a contestant on Noel Fielding's Team, and played the boss in Fuse's mockumentary The Intern. She made her first appearance as a "special commentator" on Comedy Central's The Daily Show on March 13, 2008. She is often presented as The Daily Show "Senior Women's Issues Correspondent". On April 13, 2008, she made an appearance on Good News Week during the Melbourne International Comedy Festival and in October 2008 she appeared in Amnesty International's The Secret Policeman's Ball 2008.
In 2010, Schaal appeared as a stand-up comic on John Oliver's New York Stand Up Show and at the Solid Sound Festival at the Massachusetts Museum of Contemporary Art.
She is married to Rich Blomquist as of September 2012 and has written a book with him entitled The Sexy Book of Sexy Sexy.