Donna Faske was born in New York in 1948. In 1962 she dropped out of school, and started selling clothes at a neighbourhood boutique. After 4 years, in 1966 she enrolled in the prestigious Parsons School of Design. She married Mark Karan and had a daughter Gabrielle, nicknamed Gabby. She was divorced in 1983 and married her childhood sweetheart sculptor Stephan Weiss.

In 1968 Donna took up a summer job with the designer Anne Klein. A couple of months later, she was fired because she said "I was so good, that Anne Klein felt insecure and could not stand me in the design room." Karan's talent drew the attention of Patti Cappalli head of a label called "Addenda" and it was under her tutelage that Donna Karan developed as a designer. Karan worked with Cappalli for 18 months.

In 1970 Donna Karan returned to Anne Klein. In 1974 Anne Klein died of cancer, and Donna Karan completed her unfinished collection. Donna Karan and her Parsons classmate Dell ‘Olio made Anne Klein into one of the biggest and most profitable designer sportswear companies in the USA.