Ghoussoub was born in Beiruit, where her father, Raymond Ghoussoub, a Maronite Christian Arab, was a professional footballer. She studied at the French lycée in Beirut, then math at the American University of Beirut and French literature at the Lebanese University, and later sculpture at Morley College and the Henry Moore Studio in London.
She was a Trotskyite at the start of the Lebanese Civil War in 1975, but soon became disillusioned and moved on to humanitarian work, establishing two medical dispensaries in a poor Muslim area after the doctors had left and the pharmacies had closed.
She lost an eye in 1977, after her car was hit by a shell while taking someone to hospital. She moved to London to be treated, and spent time in Paris, where she worked as a journalist for Arab newspapers. She wrote Comprendre le Liban with her childhood friend André Gaspard, under the pseudonyms Selim Accaoui and Magida Salman.
In 1979, she founded the Al Saqi bookshop in Westbourne Grove, London, with Gaspard, the first London bookshop to specialise in Arabic works. They began to publish works in Arabic in 1983. They sold the Serpent's Tail imprint to Pete Ayrton in 1987, but continued with the Saqi and Telegram imprints. An Arabic publishing house, Dar al-Saqi, was founded in Beirut in 1990.
She was a feminist, publishing works on a range of controversial issues and producing challenging artistic installations. She married twice. She married the Lebanese writer Hazem Saghieh in 1991.
Her autobiographical book, Leaving Beirut: women and the wars within, was published in 1998. She was passionately opposed to censorship, arguing in her 2006 play Texterminators, performed at the Lyric Theatre, Hammersmith and Dominion Theatre in London, the Unity Theatre, Liverpool, and the Marignan Theatre in Beirut, that "Words don't kill; humans do."