Born on May 8, 1973 in Tokachi, Hokkaidō, Japan, Arakawa was born and raised on a dairy farm with three elder sisters and a younger brother. Arakawa thought about being a manga artist "since [she] was little" and during her school years, she would often draw on textbooks. After graduating high school, she took oil painting classes once a month for seven years while working on her family's farm. During this time, she also created dōjinshi manga with her friends and drew yonkoma for a magazine.
Arakawa moved to Tokyo in the summer of 1999, and started her career in the manga industry as an assistant to Hiroyuki Etō, author of Mahōjin Guru Guru. Her own career began with the publication of Stray Dog in Square Enix's Monthly Shōnen Gangan in 1999. Stray Dog won the ninth 21st Century "Shōnen Gangan" Award. She published one chapter of Shanghai Yōmakikai in Monthly Shōnen Gangan in 2000. In July 2001, Arakawa published the first chapter of Fullmetal Alchemist in Monthly Shōnen Gangan. The series spanned 108 chapters, with the last one published in July 2010, and the series was collected in twenty-seven volumes. When the studio Bones adapted it into an anime series, Arakawa aided them in developing it.However, she later let them work alone in the making of the script so that both manga and anime would have different endings, and to develop the manga further. The series won the 49th Shogakukan Manga Award in the shōnen category in 2004. When the second anime adaptation was reaching its ending, Arakawa showed director Yasuhiro Irie her plans for the manga's ending, making both end in near dates.
She gave birth to a son in 2007, and did not take a maternity leave. Other than this she has chosen to keep her personal life private.
She is currently living in Tokyo and has published three more works, Raiden 18, Sōten no Kōmori, and Hero Tales. Arakawa has collaborated with the creation of Hero Tales with Studio Flag under the name of Huang Jin Zhou. In the anime adaptation of the series, Arakawa was responsible for the character designs. She has also drawn the cover from the Japanese edition of the novel The Demon's Lexicon authored by Sarah Rees Brennan.
In April 2011, Arakawa began a new series called Silver Spoon, serialized in Shogakukan's Weekly Shōnen Sunday