Born in Manhattan to Puerto Rican parents, Manzano attended the High School for the Performing Arts as a teenager. While going to college at Carnegie Melon University, she originated the eponymous role of Sonia in the off-Broadway musical Godspell (appearing on its original cast album as well), and continued to play the role through her first season on Sesame Street. She became part of the increasingly ethnically diverse cast and recalled that "It was such a social force... I never wanted to be on a kids’ show, but I always wanted to be on Sesame Street."  In addition to her portrayal of Maria, Manzano showed her versatility in pantomime segments, impersonating Charlie Chaplin's The Tramp, and like other cast members, frequently narrated film inserts.
In the 1980s, Manzano tried her hand at script writing, and has since become a key member of the Sesame Street writing staff, sharing several Emmy awards, and scripting several Sesame videos, including Sesame Street Visits the Hospital. She also wrote lyrics for "Muppets Rhyme in School," "You Say Hola and I Say Hola," "Thirteen," "Yell," and "Don't Be a Tough Nut to Crack." Other writing credits include episodes of the Nickelodeon animated series Little Bill, a parenting column for Sesameworkshop.org, an essay in the Marlo Thomas anthology Thanks & Giving All Year Long, and the 2004 children's book No Dogs Allowed, adapted as a stage musical in 2010. Manzano has received two Emmy award nominations for Outstanding Performer in a Children's Television Series and received the 2002 Hispanic Heritage Award for education, in addition to other awards and shows of recognition.
Married to Richard Reagan, president of the Norcross Wildlife Foundation, Manzano gave birth to daughter Gabriela Rose Reagan in 1988, a year before Maria gave birth to Gabi. Her real-life daughter played the part in Season 21 and Season 22.
The majority of Manzano's screen acting career has been spent on Sesame Street and related projects (including both Follow That Bird and The Adventures of Elmo in Grouchland), plus appearances as herself in Sesame Street Unpaved and A&E Biography: Sesame Street. Her other credits run the gamut, and include bit parts in the Michael Winner action films Death Wish (as a grocery store clerk annoyed by Jeff Goldblum) and Firepower (with James Coburn, as a stewardess). In television, she guest starred on B. J. and the Bear starring Greg Evigan (as Chattanooga in the 1981 episode "Snow White and the Seven Lady Truckers") and on Law & Order in the 2004 episode "Hands Free." On stage, she performed in The Vagina Monologues and The Exonerated. On radio, she has been a frequent narrator for the NPR dramatized fiction series Selected Shorts.
The Academy of Television Arts and Sciences Foundation interviewed Manzano in 2004 for the Archive of American Television. The hour and a half interview was posted on YouTube in 2008.