Sinhalese- and English-speaking Chitra Fernando was born in Sri Lanka and educated in Sri Lanka and Australia. She obtained a Bachelor of Arts degree from the University of Sri Lanka between 1962 and 1964, a Bachelor of Arts (Hons) degree in English Literature and a Master of Arts (Hons) degree in Linguistics from the University of Sydney, and by 1982 had been made a Doctor of Philosophy in Linguistics from Macquarie University. Her thesis The Nature and Function of Idiom with Special Reference to English (1981) was later published as Idiom and Idiomaticity (1996).
Fernando returned to Sri Lanka between 1964-1967. She migrated to Australia in 1968 to become Senior Lecturer in English and Linguistics at Macquarie University, Sydney, specialising in Post-Colonial Ritual Rites and Languages. Fernando read her work at international conferences and was involved in the Sydney Poet's Union Rewording workshop in 1987 and the Migrant Literature Conference at Macquarie University, Sydney in 1991.
Following her retirement, Fernando continued to write on class and gender issues. In addition to her academic works, Fernando also wrote fiction for children and adults, and published her writing in Sri Lanka, India, Australia and North America. Among Fernando's children's works were the plays The Firebird (broadcast on ABC radio in 1973) and The Golden Bird (performed in Hong Kong in 1987). Chitra Fernando also edited, with Rankini Obeyesekere, An Anthology of Modern Writing from Sri Lanka (1981) published by the University of Arizona Press.
Fernando's papers, including her journals, are held at the National Library of Australia.