2001 marked her career's turning point with the breakout role as "Elle Woods" in the box office hit Legally Blonde, and in 2002 she starred in Sweet Home Alabama, which became her biggest commercial film success to date. 2003 saw her return as lead actress and executive producer of Legally Blonde 2: Red, White & Blonde. In 2005, Witherspoon received worldwide attention and praise for her portrayal of June Carter Cash in Walk the Line, which earned her an Academy Award, Golden Globe, BAFTA, and Screen Actors Guild Award for Best Actress in a Leading Role.

Witherspoon married actor and Cruel Intentions co-star Ryan Phillippe in 1999; they have two children, Ava and Deacon. The couple separated at the end of 2006 and divorced in October 2007. Witherspoon owns a production company, Type A Films, and she is actively involved in children's and women's advocacy organizations. She serves on the board of the Children's Defense Fund (CDF), and was named Global Ambassador of Avon Products in 2007, serving as honorary chair of the charitable Avon Foundation.

Witherspoon was born at the former Southern Baptist Hospital (now the Ochsner Baptist Medical Center) in New Orleans, Louisiana, where her parents were living while her father was a student at Tulane University medical school. Her father, John Witherspoon, is a Georgia-born otolaryngologist who previously served as a lieutenant colonel in the U.S. Army reserves. Her mother, Betty (née Reese), is from Harriman, Tennessee, has a Ph.D. in pediatric nursing, and works as a professor of nursing at Vanderbilt University. Witherspoon has claimed to be a descendant of Scottish-born John Witherspoon, the sixth president of Princeton University and a signatory of the United States Declaration of Independence. This genealogical claim, however, has never been verified. Because Witherspoon's father worked for the U.S. military in Wiesbaden, West Germany, she lived there for four years as a small child. After returning to the U.S., she settled and spent her childhood in Nashville, Tennessee, where she was raised as an Episcopalian.

Witherspoon was selected as a fashion model for a florist's television advertisements at age seven, which motivated her to take acting lessons. At age eleven she took first place in the Ten-State Talent Fair. Witherspoon received good grades in school; she loved reading and considered herself "a big dork who read loads of books." On mentioning her love for books, she said, "I get crazy in a bookstore. It makes my heart beat hard because I want to buy everything." Witherspoon attended middle school at Harding Academy and graduated from the prestigious all-girls' Harpeth Hall School in Nashville, Tennessee, during which time she was a cheerleader. She attended Stanford University as an English literature major. After completing one year of studies, she left Stanford to pursue an acting career.

Witherspoon is proud of the "definitive Southern upbringing" she received, which, as she said, gave her "a sense of family and tradition" and taught her about "being conscientious about people's feelings, being polite, being responsible and never taking for granted what you have in your life." Witherspoon is described as a "multi-achiever" and was given the nickname "Little Type A" by her parents. On discussing her early achievements, she told Interview magazine, "I just don't see any of it as that remarkable. Maybe that's the attitude I choose to have to keep me sane and keep my feet on the ground. I grew up in an environment where women accomplished a lot. And if they weren't able to, it was because they were limited by society."

In 1990, Witherspoon attended an open casting call for The Man in the Moon with some friends, intending to audition as a bit player. She was instead cast in the lead role of Dani Trant, a 14-year-old country girl who falls in love for the first time with her 17-year-old neighbor. Her performance was regarded as "memorably touching" by Variety magazine, and critic Roger Ebert commented, "Her first kiss is one of the most perfect little scenes I've ever seen in a movie." For this role, Witherspoon was nominated for the Young Artist Award Best Young Actress. Later that year, she made her TV acting debut in the cable movie Wildflower, directed by Diane Keaton and starring Patricia Arquette. In 1992, Witherspoon appeared in the TV movie Desperate Choices: To Save My Child, portraying a critically ill young girl. In 1993, she played a young wife in the CBS mini series Return to Lonesome Dove, and got a starring role as the leading character Nonnie Parker, a South African girl who must cross 1,250 miles (2,000 km) of the Kalahari, in the teen-aimed Disney film A Far Off Place. In the same year, Witherspoon had a minor role in Jack the Bear, which garnered her the Young Artist Award for Best Youth Actress Co-star. The following year, Witherspoon acted in another leading role as Wendy Pfister in the 1994 film S.F.W., directed by Jefery Levy.

In 1996, Witherspoon was offered parts in two major movies. She appeared in the thriller Fear alongside Mark Wahlberg and Alyssa Milano, playing the role of Nicole Walker, a teenage girl with a handsome boyfriend who turns out to be a violent psychopath. She was also the leading actress in the thriller and black comedy Freeway, starring alongside Kiefer Sutherland and Brooke Shields. Her character, Vanessa Lutz, is a poor girl living in Los Angeles, who, on the way to her grandmother's home in Stockton, encounters a freeway serial killer. The film received positive reviews from the press. Among them was the San Francisco Chronicle, with Mick LaSalle commenting, "Witherspoon, who does a shrill Texas accent, is dazzling, utterly believable in one extreme situation after the other." Witherspoon's performance won her the Best Actress Award at the Cognac Police Film Festival, and firmly established her as a rising star. The making of the movie also gave Witherspoon significant acting experience; as she said, "Once I overcame the hurdle of that movie – which scared me to death – I felt like I could try anything." Following completion of Freeway in 1997, Witherspoon took a break from acting in major movies for a year, and began dating actor Ryan Phillippe. She returned to the screen in 1998 with major roles in three movies, Overnight Delivery, Pleasantville and Twilight. In Pleasantville, Witherspoon starred alongside Tobey Maguire in a tale about a pair of 1990s teenage siblings who are magically transported into the setting of a 1950s television series. She portrayed the sister Jennifer, who is mainly concerned about appearances, relationships, and popularity. Witherspoon's performance received good reviews and garnered her the Young Hollywood Award for Best Female Breakthrough Performance. Director Gary Ross said he firmly believed Witherspoon was going to be an outstanding movie star.

In 1999, Witherspoon starred alongside Alessandro Nivola in the drama thriller Best Laid Plans; she played Lissa, a woman who schemes with her lover Nick to escape a small, dead-end town. In this same year, she co-starred with Sarah Michelle Gellar and Ryan Phillippe in the drama film Cruel Intentions, a modern take on the 18th-century French novel Les Liaisons Dangereuses. Her performance as Annette Hargrove was praised by the San Francisco Chronicle: "Witherspoon is especially good in the least flashy role, and even when called upon to make a series of cute devilish faces, she pulls it off." Coincidentally, she appeared in a music video by Marcy Playground for the film's soundtrack. In the same year, Witherspoon and Matthew Broderick starred in the film adaptation of the 1998 novel Election by Tom Perrotta. She portrayed Tracy Flick, a competitive and ambitious over-achiever who runs for student body president. She received vast critical acclaim for her performance and won the Best Actress Award from the National Society of Film Critics and the Online Film Critics Society, a first Golden Globe nomination and an Independent Spirit Award nomination. Witherspoon also received a rank on the list of 100 Greatest Film Performances of All Time by Premiere. Academy Award – winning director Alexander Payne praised her: "She's got that quality that men find attractive, while women would like to be her friend. But that's just the foundation. Nobody else is as funny or brings such charm to things. She can do anything." In spite of her successful performance, Witherspoon noted in an interview that she struggled to find work after completing the film, due to typecasting. When analyzing the reasons behind her difficulty to find work, Witherspoon commented "I think because the character I played was so extreme and sort of shrewish – people thought that was who I was, rather than me going in and creating a part. I would audition for things, and I'd always be the second choice – studios never wanted to hire me, and I wasn't losing the parts to big box office actresses but to ones who I guess people felt differently about."

In 2000, Witherspoon received a supporting role in American Psycho and made a cameo appearance in Little Nicky. She also appeared as a guest star in season six of Friends, playing the role of Jill Green, Rachel Green's sister. The next year, Witherspoon provided the voice of Serena in the animated film The Trumpet of the Swan, produced by Crest Animation Productions.

2001 marked a significant turning point in Witherspoon's career, when she starred in the feature film Legally Blonde. She portrayed Elle Woods, a fashion merchandising major who decides to become a law student in order to follow her ex-boyfriend to Harvard University. Speaking about Woods' character, Witherspoon said "When I read Legally Blonde, I was like, 'She's from Beverly Hills, she's rich, she's in a sorority. She has a great boyfriend. Oh yeah, she gets dumped. Who cares? I still hate her.' So we had to make sure she was the kind of person you just can't hate." Legally Blonde was a box office hit, grossing US$96 million domestically. Witherspoon's performance earned her praise from critics, as the press began referring to her as "the new Meg Ryan". Roger Ebert commented, "Witherspoon effortlessly animated this material with sunshine and quick wit", and Salon.com noted that "she [Witherspoon] delineates Elle's character beautifully". Meanwhile, the Seattle Post-Intelligencer concluded, "Witherspoon is a talented comedian who can perk up a scene just by marching in full of pep and drive and she powers this modest little comedy almost single-handedly." For her work, Witherspoon garnered her second Golden Globe Best Actress nomination and an MTV Movie Award for Best Comedic Performance.