Megan is an only child born in Los Angeles, California. Her mother, Martha, was a model. Her father, Carter Mullally Jr., is a retired contract player for Paramount. Megan first entered Northwestern University intending to study acting, but switched to English literature. However, she still ended up starring in several campus musicals, which gained attention from producers and prompted her to drop out of school. In 1985, she moved to Los Angeles with no particular success. But, in 1994, she co-starred in "Grease" with Rosie O'Donnell and, in 1995, in "How To Succeed In Business" with Matthew Broderick. Her star has been rising ever since.