A native of the former Transkei region, she grew up in a township near Cape Town, where she worked as a domestic and completed her secondary education by correspondence. Magona later graduated from the University of South Africa and earned a Master of Science Degree in Organisational Social Work from Columbia University. In 1993 she was awarded an Honorary Doctorate in Humane Letters from Hartwick College, Oneonta, and in 1997 she was a New York Foundation for the Arts Fellow in the non-fiction category. She had starred as Singisa in the isiXhosa classic drama Ityala Lamawele.
She worked in various capacities for the United Nations over 20 years, retiring in 2003, and currently lives in South Africa. In 2007 she was awarded the Grinzane Award for writing that addresses social concerns, the Molteno Gold Medal for promoting the Xhosa culture and language, as well as a Lifetime Achievement Award for contribution to South African Literature. In 2011 she was given the Order of iKhamanga, a Presidential Award and the highest such award in South Africa, and in 2012 she was joint winner with Nadine Gordimer of the Imbokodo Award. In the 2013 computer-animated adventure comedy film Khumba she was the voice actor for the character Gemsbok Healer.
She published her autobiography To My Children's Children in 1990. In 1998, she published Mother to Mother, a fictionalized account of the Amy Biehl killing, which she adapted to a play. This was performed at the Baxter Theatre complex in late 2009 and the film rights to the novel were acquired by Type A Films in 2003. She has also written autobiographies and short story collections. Her novel Beauty's Gift was shortlisted for the 2009 Commonwealth Writers' Prize Best Book, Africa Region. In 2009, Please, Take Photographs, her first collection of poems, was published.