Caroline Dhavernas was born in Montreal, Quebec the daughter of the Québécois actors Sébastien Dhavernas and Michèle Deslauriers. Her sister Gabrielle Dhavernas is also an actress and specialises in dubbing. The voice timbre of both actresses is very similar, so similar that Gabrielle can dub the voice of Caroline. She learned English at a very young age, as her parents sent her to an English-speaking elementary school.

She began her career at the age of 8, dubbing voices for television productions such as Babar. At the age of 12 she began her acting career in the film Comme un Voleur (1990).

Dhavernas portrayed swimmer Marilyn Bell in the made-for-television movie Heart: The Marilyn Bell Story (1999). She trained for 2 months with the Pointe-Claire Swim Club to convincingly portray Bell who was the first to cross 32-mile Lake Ontario in 1954. Other notable films have included a leading role in Edge of Madness (2002), and supporting roles in Out Cold (2001) and Lost and Delirious (2001). She also had a notable role on Law & Order as a closeted, gay teenager who killed her girlfriend in the episode "Girl Most Likely".

Her most high-profile work to date is as the central character in Wonderfalls. Dhavernas plays Jaye, an underachiever university graduate from a wealthy family who lives in a trailer and works at the Wonderfalls Gift Emporium, a Niagara Falls gift shop. One of the quirks of the show is Jaye's ability to hear inanimate objects speaking to her, and encouraging her to help other people. Dhavernas has described the show as being like "Touched by an Angel on acid". The show received widespread critical praise, but Fox canceled the show after four airings. Millions of fans signed a petition to try to get the show to stay but only partly succeeded with 20th Century Fox only releasing the DVD (the complete 13 episodes DVD is now available). She did her own voice-overs for the French translation of Wonderfalls.

Since the cancellation of Wonderfalls, Dhavernas has continued to appear in Canadian-made features, including Niagara Motel and These Girls. She also appears in the 2006 film Hollywoodland about the death of actor George Reeves, as well as in the 2007 film Breach.

She also has the lead role in Surviving My Mother, a movie directed by Émile Gaudreault which premiered at the Festival des films du monde of Montreal on August 28, 2007.

Upcoming projects include The Cry of the Owl (2009), a movie adaptation of Patricia Highsmith's novel of the same name and Passchendaele, a film written and directed by Paul Gross about the Battle of Passchendaele. Said Dhavernas about the latter, "It's a beautiful film and I'm really, really happy to be part of it. It's about Battle of Passchendaele, which was a very important battle for Canadians and it's a big part of our history. It was just so amazing to be privileged to live a little part of that history."