Born Caryn Johnson on November 13, 1955 in New York City, Goldberg began her long career when she was eight years old, performing with New York's Helena Rubenstein Children's Theater. She then went on to study with the Hudson Guild children's arts program and attended the prestigious High School for the Performing Arts. After graduating, Goldberg occasionally won small parts in Broadway productions such as Hair, Pippin and Jesus Christ Superstar, but also supported herself doing odd jobs like bricklaying and serving as a funeral parlor make-up artist. In 1975, Goldberg moved West and helped found the San Diego Repertory Theater, where she appeared in a number of plays, including Brecht's Mother Courage and Marsha Norman's Getting Out.

After several stints with the Spontaneous Combustion improvisational troupe and work in avant-garde productions at Berkeley's Blake Street Hawkeyes theater, Goldberg devised The Spook Show, a one woman satirical production in which she played several characters. The show, which originated in San Francisco, eventually toured the U.S. and Europe, earning acclaim and the attention of director Mike Nichols. Nichols went on to direct a 1984 Broadway version of the show, which earned Goldberg Drama Desk and Theatre World awards, as well as a Grammy for the album recording.

Goldberg made an auspicious Hollywood debut with her portrayal of Celie, the lead character in Steven Spielberg's controversial 1985 adaptation of Alice Walker's novel. Goldberg's moving performance was rewarded with an Oscar nomination and Best Actress Golden Globe, as well as instant stardom for the actress. Although Goldberg's film career looked promising, the actress unfortunately spent much of the decade's remainder appearing in terrible action comedies such as Fatal Beauty and Burglar (both 1987) that did not do her comic gifts justice. Her one partial success during this period was her first action comedy, Jumpin' Jack Flash (1986), which did relatively well at the box office and gave her a certain cult status.

In 1988, Goldberg took a break from comedy with a memorable turn as a worldly Jamaican nanny in the otherwise unremarkable Clara's Heart. She also made numerous appearances in television specials, most notably as a co-host for the annual Comic Relief benefit for the homeless. Her attempt at sitcoms failed with the short-lived series Bagdad Cafe, but she did find greater television success with a small but crucial recurring role as the sagacious intergalactic bartender Guinan on the syndicated Star Trek: The Next Generation. Around the same time, Goldberg's film career underwent a sharp turn-around. She won acclaim playing a selfless housekeeper opposite Sissy Spacek in the provocative Civil Rights drama The Long Walk Home (1989), and then played an eccentric con artist possessing unexpected psychic powers in the 1990 smash hit Ghost. Goldberg's funny yet moving performance earned her her first Oscar and the widespread opinion that this marked her comeback performance. After a couple of missteps that had a few people rethinking this verdict, Goldberg scored again with the 1992 hit comedy Sister Act. Nominated for Golden Globes and two NAACP awards, the film spawned mass ticket sales and an unsuccessful 1993 sequel, Sister Act 2: Back in the Habit.