Diaz, the younger of two daughters, was born in San Diego, California. At age sixteen, she began her career as a fashion model, contracted with modeling agency Elite Model Management. For the next few years, she worked around the world for contracts such as with major companies, modeling for designers such as Calvin Klein and Levi's. When she was age 17, she was featured on the front cover of the July 1990 issue of Seventeen.
At age 21 Diaz auditioned for The Mask, based on the recommendation of an agent for Elite, who met the film's producers while they were searching for the female main actress. Having no previous acting experience, she started acting lessons after being cast. Preferring to feel her way effectively into the industry, Diaz avoided large studio films for the next three years and took roles in the independent films The Last Supper (1995), Feeling Minnesota (1996), She's the One (1996), and Head Above Water (1996). She was scheduled to feature in the film Mortal Kombat, but had to resign after breaking her hand while training for the role.
Diaz returned to mainstream films with My Best Friend's Wedding and A Life Less Ordinary, both released in 1997. The following year, she played the title role in the smash hit There's Something About Mary (1998), for which she was nominated for a Golden Globe Award for the category of Best Actress – Musical or Comedy. She received critical acclaim for her performance in Being John Malkovich (1999), which earned her Best Supporting Actress nominations at the Golden Globe Award, the British Academy of Film and Television Arts Awards, and the Screen Actors Guild Awards. Between 1998 and 2000, Diaz featured in many movies, such as Things You Can Tell Just by Looking at Her, Very Bad Things, Any Given Sunday, and the successful adaptation of Charlie's Angels. In 2001, she won nominations for Best Supporting Actress for the Golden Globe Awards, the SAG Awards, the Critics' Choice Awards, and the American Film Institute Awards for Vanilla Sky, and also voiced Princess Fiona in the movie Shrek, for which she earned $10 million.
In 2003, Diaz received another Golden Globe nomination for Martin Scorsese's 2002 epic Gangs of New York, and became the third actress (after Wedding costar Julia Roberts) to earn $20 million for a role, receiving the sum for Charlie's Angels: Full Throttle. Her next movies were In Her Shoes (2005) and The Holiday (2006). She was preparing to work again with The Mask co-star Jim Carrey for the film Fun with Dick and Jane, but resigned to feature in In Her Shoes.