Kusama was born in St. Louis, Missouri, the daughter of Haruo Kusama, a Japanese child psychiatrist and Susan McGuire, an Midwestern educational psychiatrist. She graduated from Ladue Horton Watkins High School in St. Louis, and in 1990, she earned a BFA in Film & TV from New York University’s Tisch School of the Arts.

After graduating from NYU, where she won a Mobil Prize for a student film called Sleeping Beauties, Kusama worked as an editor on documentary films, in production on independent film and music videos, as a nanny, and painting houses. Through her nanny job she met filmmaker John Sayles and worked as his assistant for three years while he was making the film Lone Star, as well as the development of his films Men with Guns and Limbo. While working for Sayles, she continued to write screenplays. In 1992, Kusama started boxing at Gleason’s Gym in Brooklyn, training with Hector Roca. She began collecting ideas for Girlfight, but didn’t start writing it until two years later.

At age 31, Kusama wrote and directed her debut feature, Girlfight. It took several years to find financing for the film, reportedly due to her insistence that the main character be a Latina rather than allowing the film to become a vehicle for a well-known white actress. After financing fell through shortly before shooting began, Girlfight was partially financed by film-maker John Sayles, for whom she worked as an assistant at the time and who served as a mentor. The film was released in 2000 and won the Director’s Prize and shared the Grand Jury Prize at the Sundance Film Festival, as well as the Prix de la Jeunesse at the Cannes Film Festival. The independent feature film with a budget of around US$1 million was critically well received. However, it brought in only US$1,667,000, which was considered a poor return; it has since become a classic example of the “Sundance Effect”.

In 2005, Kusama directed her second film, Æon Flux, a Paramount Pictures studio production that starred Charlize Theron and had a budget of US$62,000,000. The film had been ushered through production by Paramount studio chief Sherry Lansing but during production Lansing left, which resulted in the film being recut and reworked, with significant changes from Kusama’s original vision. Following this experience, Kusama said she would never again work on a film in which she doesn’t have control of the final cut. Its worldwide gross was estimated at $10 million below budget, putting Kusama’s career on ice for years afterwards.

Kusama married screenwriter Phil Hay in October 2006. They have a son. Although they had known each other since meeting at Sundance when Girlfight premiered in 2000, it wasn’t until they worked together on Æon Flux that they began dating.

In 2009, Kusama directed the horror film Jennifer’s Body, which was written by Diablo Cody and starred actress Megan Fox in the lead role. The film grossed approximately US$31,000,000 on a budget of around US$16,000,000. Despite its box office success, the film received mixed reviews from critics upon its release but has since become a cult classic. The film was critically reassessed over time as a “forgotten feminist classic”. According to Cody, the film was marketed incorrectly by executives who focused their efforts on the young male audience. In regards to the reappraisals of the film, Kusama credited its “distinctly female perspective,” stating she had intended to make a film where young women could see themselves represented. Kusama has since described working on both Æon Flux and Jennifer’s Body as “learning experiences,” wherein she learned how to navigate the Hollywood studio system.

In 2013, Kusama directed the short film Speechless. Starting in 2014, Kusama began working regularly in television as a director on several series, such as Halt and Catch Fire, The Man in the High Castle, Casual, Billions, and The Outsider. Kusama was slated to direct an adaptation of Breed, an adult horror novel by Scott Spencer under the pen name Chase Novak. The film was to be produced and written by Kusama’s husband Phil Hay and his partner Matt Manfredi, but there have been no updates since the film’s announcement.

In 2015, Kusama directed The Invitation, a horror film written by Kusama’s husband Phil Hay and his writing partner Matt Manfredi, and starring Logan Marshall-Green. The film was funded by a film consortium called Gamechanger Films, who fund films directed by women. It premiered at the 2015 SXSW Festival, to great acclaim, and was released by Drafthouse Films. The film would win the International Critic’s Award at the 2015 Neuchâtel International Fantastic Film Festival, and was also nominated for Best Picture. Other accolades won by the film included Best Film at the 2015 Sitges Film Festival and the Golden Octopus at the 2015 Strasbourg European Fantastic Film Festival.

In 2017, Kusama wrote and directed a segment, titled “Her Only Living Son”, in the all-female directed anthology horror film XX.

In 2018, Kusama directed the Los Angeles-set crime thriller film Destroyer, which starred Nicole Kidman in the lead role. According to Kusama, Kidman had lobbied for the part after reading the script. The film made its debut at the Telluride Film Festival to positive reactions for Kusama’s direction and Kidman’s performance, but bombed at the box office.