Wilson was born in Los Angeles. She co-founded Wilson Phillips with Carnie and childhood friend Chynna Phillips when they were in their teens. Wilson Phillips released two albums in 1990 and 1992 before splitting up. Wendy and Carnie released a Christmas album together in 1993 and an album called The Wilsons in 1997 with their formerly estranged father, Brian. In 2004, Wendy reunited with Carnie and Phillips for a third Wilson Phillips album entitled California. In 2012, the reunited Wilson Phillips released the album, Dedicated, which comprised covers of songs by The Beach Boys and The Mamas and Papas. In June 2012 Wendy joined her sister Carnie and other members of The Beach Boys' families to form the vocal group, California Saga, which performed at the intermission during the homecoming Hollywood Bowl show of The Beach Boys' 50th anniversary tour.
Wilson married record producer/sound engineer Daniel Knutson on May 24, 2002 in the rose garden of The Ritz-Carlton in Marina Del Rey, and they have four sons: Leo Evan Knutson (b. September 14, 2003), Beau Alexander Knutson (b. September 23, 2004), and twins, Will Hunter and Jesse Miles Knutson (b. August 17, 2007).
In February 2008, Wilson appeared in an episode of the American reality TV program, Supernanny. Her sister Carnie and her niece Lola Bonfiglio also made an appearance in the episode. In April 2008 Wilson appeared in an episode of the Tyra Banks show, Amazing Moms.
On January 7, 2010, Wilson appeared with her sisters, their mother Marilyn, and their husbands on a special edition of The Newlywed Game.
In 2012 Wilson Phillips created a reality television show called "Wilson Phillips; Still Holding On". The show premiered on the TV Guide network.