Monaghan was born in Winthrop, Iowa, the daughter of Sharon Monaghan (who ran a day care center in the family’s home), and Bob Monaghan (a factory worker and part time farmer). She has two older brothers, Bob and John and her family frequently fostered and adopted children. She graduated from East Buchanan High School, Class of 1994, where she was the class president and acted in several plays. After graduation, she moved to Chicago to study journalism at Columbia College Chicago. Between studying, she did some modeling in the United States and in Milan, Singapore, Tokyo and Hong Kong. She left college with one semester remaining to move to New York to pursue modeling and acting.
Monaghan’s first notable though minor parts were in episodes of Young Americans, (in which she appeared twice), and Law & Order: Special Victims Unit, both in 2001. Monaghan made her big screen debut that year in the small role of Henrietta in the movie Perfume. This was followed by another small role in Unfaithful in 2002. She expanded her résumé by doing commercials for products such as Stayfree deodorant in 2001 and Secret Sheer dry in 2002.
Monaghan had a big break in 2002 when she co-starred in the television series Boston Public in the role of Kimberly Woods. After guest starring for a season on the television series, Monaghan turned back to the silver screen. She appeared in It Runs in the Family in 2003, Winter Solstice in 2004 and Kiss Kiss Bang Bang in 2005, in which she did her first and so far only on-screen nude scene with co-star Robert Downey, Jr. She is also known for having scenes deleted from both Constantine and Syriana. Her audition tape from Constantine earned her an audition for Mission Impossible III and within 20 minutes she had the role of Julia, with Tom Cruise.
In 2007, she starred in the remake of The Heartbreak Kid, opposite Ben Stiller, as Miranda, the role originally played by Cybill Shepherd. She also starred in Gone Baby Gone as the main female protagonist Angie Gennaro with Casey Affleck. In 2008, she appeared as Hannah alongside Patrick Dempsey in Made of Honor. She is currently co-starring in Eagle Eye with Shia LaBeouf.
She met Australian graphic artist Peter White at a party in 2000 and they were married in August 2005. They live in New York City and are expecting their first child in late fall of 2008.