Born to Chinese parents in Jackson Heights, NY, on December 2, 1968, Liu grew up speaking both English and Mandarin. After graduating from Manhattan's Stuyvesant High School, she earned a degree in Asian languages and cultures from the University of Michigan, where she also studied acting, dance, and voice. Liu's first professional job was playing a waitress on Beverly Hills 90210, something that led to more substantial work on various TV shows, including a regular part on the TV series Pearl.

Liu's biggest breakthrough came in 1998, when she was cast as Ling Woo on Ally McBeal. She had originally auditioned for the role of Nelle Porter, which ultimately went to Australian actress Portia DeRossi. David E. Kelley, the show's producer, was so impressed with Liu's audition, however, that he created the role of Ling Woo specifically for her. The character was initially supposed to be included on only a few episodes, but proved so popular with the show's audience that Liu was made into a regular cast member.