Born in India, Vaid moved with her family to the U.S. eight years later. She was politically active from an early age, participating in the anti-Vietnam war movement, then at Vassar becoming active in a variety of feminist and human rights causes. She received a law degree from Northeastern University in Boston, where she founded an LGBT rights group.
Her first professional work was done for the ACLU and other advocacy firms, strengthening support for disenfranchised Americans. At the ACLU her main focus was better prison conditions; a multi-issue concern for justice has continued to be at the heart of her activism. Her involvement with the LGBT movement led her to the National Gay and Lesbian Task Force.
She took over leadership of the NGLTF's Policy Institute in 1989, and quickly built the NGLTF into the nation's pre-eminent gay rights NGO, serving as the organization's executive director for three years. She pushed gay issues into the public eye through savvy media manipulation and staged numerous successful protests on such subjects as abortion and the Persian Gulf War.
One of the achievements she remembers most proudly is disrupting George Bush the First's initial policy speech by holding up a sign about AIDS funding. Her longtime partner, comedian Kate Clinton, jokes that Vaid is a woman "who thinks a bullhorn is a sexual device".
In 1992 she left her job at the NGLTF to write a book, Virtual Equality: The Mainstreaming of Gay and Lesbian Liberation, in which she is critical of this phenomenon, which she feels provides the semblance of equality in a system that is founded on oppression. The book also highlights connections between LGBT rights, racism, sexism, and economic justice.
Vaid returned to the NGLTF in 1997 before taking a job at the Ford Foundation as deputy director of the Program for Governance and Civil Society. She is a former member of the feminist collective publication Sister Courage in Boston. Currently she is working to expand her agenda further in the direction of an integrated progressive movement.
In 1999 she was awarded an honorary degree from CUNY's school of law. She has been named, in 1994, one of Time Magazine's fifty young leaders to watch in the new century and one of A. Magazine's 25 most influential Asian-Americans, among many other honors. Billie Jean King established the Vaid Fellowship for people of color at the NGLTF Policy Institute in her honor. Urvashi's life partner is Kate Clinton.