Monaghan was born in Winthrop, Iowa, the daughter of Sharon (née Hammel), who ran a day care center in the family's home for forty years, and Robert Monaghan, a factory worker. She has two older brothers, Bob and John. Monaghan has Irish and German ancestry, and was raised Catholic.
She graduated from East Buchanan High School in 1994, where she was class president and acted in several plays. After graduation, she moved to Chicago to study journalism at Columbia College Chicago and began to model. She modeled in Milan, Singapore, Tokyo and Hong Kong, as well as in the United States. With one semester remaining to complete her journalism degree in 1999, she left for New York to pursue an acting career, where she appeared as a model in several magazines and catalogs before making her acting debut.