Cavanagh was born November 8, 1960 in Chicago, the daughter of Jim and Rita. Raised in River Forest along with her four siblings, Cavanagh went to Oak Park and River Forest High School, graduating at 16 in 1977. She attended Rosary College in River Forest (now Dominican University), graduating in January 1982.
Cavanagh was an original member (1984–1987) of the professional theatre troupe New Age Vaudeville (formerly the Comedy Cabaret) founded by Richard O'Donnell and Amy McKenzie. An Actor’s Equity (AEA) theatre troupe, the Comedy Cabaret landed a summer residence at Peninsula Players in Fish Creek, Wisconsin, where it developed works for a predominately tourist trade and then relocated to their winter home in Chicago at CrossCurrents. Throughout her tenure, Megan Cavanagh (who thus earned her Actors' Equity union card) starred in numerous productions including the cult-hits An Evening with Elmore & Gwendolyn Putts - The Neighbors Next Door and The TV Dinner Hour (the latter featured IO Theater founder Del Close). Rick Kogan of the Chicago Tribune hailed both productions as "Among the most polished and clever productions of the season, a pair of devilishly inventive and challenging shows that won over critics and audiences".
Cavanagh was featured in the short-lived second season of Bob (1993) and played the recurring role of Trudy McHale, who married Al Borland in the series finale, on the sitcom Home Improvement starring Tim Allen, Patricia Richardson and Earl Hindman (1998–99).
Cavanagh has been married to her wife, filmmaker Anne Chamberlain, since 2008.
In 2009, Cavanagh performed the medium Madame Arcati in High Spirits, a musical with a book, lyrics, and music by Hugh Martin and Timothy Gray, based on the play Blithe Spirit by Noël Coward. 42nd Street Moon’s production was staged at the Eureka Theatre, 215 Jackson St in San Francisco, and was well received. San Francisco theater critic Chad Jones writes, “On Broadway, [Angela] Lansbury is said to be Divine in the role, but 42nd Street Moon has a real secret weapon here: Megan Cavanagh,...Cavanagh is hilarious and heartfelt.”
Cavanagh returned to the stage completing a 10-city tour as Earth Mother in Menopause: The Musical. Theater critic Patricia Reardon wrote, “...you won’t find a funnier, more satisfying way to spend an evening than with the four rollicking ladies of Menopause The Musical.”
