During her childhood in Spain, Varo was influenced by her engineer father, who taught her to draw, and her strict Catholic schooling, against which she rebelled. Following her graduation from art school, she pursued Surrealism and political change.

She moved to Paris in 1937, later finding that she could not return to Spain following the Spanish Civil War. Varo associated and exhibited with the Surrealists, exploring magic, alchemy, and analytical psychology. As World War II threatened Paris, Spanish refugees came under threat. Varo was arrested and held in early 1940. After her release, she fled Paris in the face of the Nazi invasion, and by late 1941 had secured passage to Mexico.

In Mexico, Varo remained friends with fellow refugees from her European Surrealist circle, including artist Leonora Carrington, who became her closest friend and collabo­rator. In the late 1940s, as she supported herself through commercial illustration, Varo began to develop her mature personal style. During succeeding decades, she devoted increased time and energy to her art, and she delved further into the fantastical sources that captured her imagination. Her death of a heart attack in 1963 occurred as she was reaching new renown.