Born Anne Fontaine Sibertin-Blanc in Luxembourg, sister of actor Jean-Chrétien Sibertin-Blanc, she went as a young child to live in Lisbon, where her father, Antoine Sibertin-Blanc, is a music professor and cathedral organist. In adolescence she moved to Paris and trained in dance with Joseph Russillo while continuing her academic education, including philosophy. Her husband is Philippe Carcassonne, the film producer, and they have an adopted son, Tienne, who was born in Cambodia.
While still dancing, she was picked by Robert Hossein to play Esmeralda in a 1980 theatrical production of The Hunchback of Notre Dame and around this time started to use the name Anne Fontaine. She continued with acting and became known for her roles in comedies like Si ma gueule vous plaît... (1981) and P.R.O.F.S.(1985). An opportunity to be assistant director came with a 1986 stage version of Louis-Ferdinand Céline's Voyage au bout de la nuit (Journey to the End of the Night) at the Renaud-Barrault theatre.
Fontaine's first project as solo director, Les histoires d'amour finissent mal... en général (Love Affairs Usually End Badly), won the 1993 Prix Jean Vigo (prize). In 1995, she worked with her brother on the comic Augustin. Two years later, she wrote and directed the successful Nettoyage à Sec (Dry Cleaning). This won the Best Screenplay award at the Venice Film Festival 1997 and is generally considered a milestone on Fontaine's way to becoming "an important figure in contemporary French cinema".
Fontaine's work is not easily categorised, though the phrase "psychological drama" is often used. She told a UK newspaper, "I try to work on my characters' blind side, in a kind of Freudian way: to ask, 'What are the things about themselves that they're unaware of?' I'm fascinated by the irony of fate, when something goes into a skid. All my stories have an element of cruelty in them."