Garvey was born in Port Antonio, Jamaica, she spent some years living in Panama. As a child, she was told by grandmother that she was of Ashanti descent. She returned to Jamaica as a teen and attended Westwood High School in Trelawney, where she met Marcus Garvey , with whom she founded the Universal Negro Improvement Association (UNIA) in 1914. She organised a women's section of the UNIA, and in 1918, she moved to the United States, where she worked as Garvey's aide and as Secretary of the UNIA's New York branch. She and Marcus Garvey married on 25 December 1919, but the marriage quickly broke down, ending in divorce in 1922. There followed lawsuits and counter suits for annulment, divorce, alimony and bigamy. Garvey divorced Ashwood in Missouri in 1922 and quickly married Amy Jacques, Ashwood's former roommate and maid of honor. Marcus Garvey accused Ashwood of infidelity, theft, alcoholism and laziness. Amy Ashwood reportedly never accepted the divorce and contended to the end of her days that she was the "real" Mrs. Garvey.

Ashwood became a director of the Black Star Line Steamship Corporation, and founded the Negro World newspaper. She moved to Great Britain, where she struck up a friendship with Ladipo Solanke. Together, they founded the Nigerian Progress Union, and she later supported Solanke's West African Students' Union, but in 1924 she returned to New York, where she produced comedies with her companion, Sam Manning, a Trinidadian calypso singer who was one of the world's pioneering black recording artists. Among the productions was Brown Sugar, a jazz musical production at the Lafayette Theater, which featured Manning and Fats Waller and his band.

In 1934, she returned to London, and with Manning, she opened the Florence Mills Social Club a jazz club on Carnaby Street which became a gathering spot for supporters of Pan-Africanism. She helped to establish the International African Service Bureau and the London Afro-Women's Centre. She returned to New York and then Jamaica, where she was affiliated with J.A.G. Smith's political activities. In 1944, she again returned to New York, where she joined the West Indies National Council and the Council on African Affairs, and also campaigned for Adam Clayton Powell Jr.

She chaired the first session of the 5th Pan-African Congress in Manchester in 1945. In 1946, Ashwood moved to Liberia for three years, where she began a relationship with the country's president, William Tubman. She then returned to London, helping to set up the Afro Peoples Centre in Ladbroke Grove in 1953. In the wake of the Notting Hill riots in 1958, she co-founded the Association for the Advancement of Coloured People.[11][12] In 1959, she chaired an enquiry into race relations following the murder of Kelso Cochrane in London, before returning to Africa in 1960. She later toured the Americas. She died in 1969, aged 72.