Born in Portland, Oregon, Kaitlin cultivated her passion for acting at the University of Oregon, where she got her Bachelor's degree in Theatre Arts. After her stint on stage, she moved to Los Angeles to pursue acting professionally. She began at The Groundlings Theatre in Hollywood, training ground to comic greats such as Will Ferrell and Phil Hartman. Kaitlin secured a coveted spot in The Groundlings Sunday Company, which proved to be an amazing showcase, leading to recurring roles on both Curb Your Enthusiasm (2000), where Kaitlin plays "Becky", Larry's sister-in-law, and The Drew Carey Show (1995), where she played "Traylor", Mimi's nemesis, for two seasons.

Olson also had the honor of joining Drew Carey and several cast members of Whose Line Is It Anyway? (1998) on a USO tour, performing improv shows for US troops in Bosnia, Kosovo and Norway.

Soon after The Drew Carey Show (1995) ended, Olson was cast as a series regular on the Fox series Kelsey Grammer Presents: The Sketch Show (2005).

Previously, Olson has been a series regular on the Fox improv/hidden camera series Meet the Marks (2002) and recurred on Punk'd (2003) and The Jamie Kennedy Experiment (2002). She has also had notable guest starring roles on Out of Practice (2005) and Miss Match (2003), opposite Alicia Silverstone.

Olson currently stars as "Sweet Dee" on the FX breakout sitcom, It's Always Sunny in Philadelphia (2005).