Derartu grew up tending cattle in the village of Bekoji in the highlands of Arsi Province, the same village as Kenenisa Bekele.

Derartu is the first Ethiopian woman and the first black African woman to win an Olympic gold medal, which she won in the 10,000 m event at the 1992 Barcelona Olympic Games.The race, where she and Elana Meyer (South Africa) raced for lap after lap way ahead of the rest of the field, launched her career. She sat out 1993 and 1994 with a knee injury and returned to competition in the 1995 IAAF World Cross Country Championships where she won gold, having arrived at the race only an hour before the start. She was stuck in Athens airport without sleep for 24 hours. The same year she lost out to Fernanda Ribeiro and won silver at the World Championships 10,000.

The 1996 season was a difficult year for her. At the IAAF World Cross, Country Championships Derartu lost her shoe in the race and had to fight back to get fourth place. She also finished fourth at the Olympic Games, where she was nursing an injury. In 1997 she won the world cross country title for the second time but did not factor in the 10,000 m World Championships. In 1998 she gave birth to a daughter, Tsion, but came back in 2000 in the best shape of her life. She won the 10,000 m Olympic gold for the second time (the only woman to have done this in the short history of the event). She also won the IAAF World Cross Country Championships title for the third time. In 2001, she finally won her world 10,000 track title in Edmonton. This was her third world or Olympic gold medal. She has a total of 6 world and Olympic gold medals.

Her transition to the marathon was rewarded with victories in London and Tokyo Marathons in 2001. She finished fourth at the 2005 World Championships, setting her personal best time of 2:23:30. She also won the Portugal Half Marathon in 2000 and 2003, and Lisbon Half Marathon in 2003. In 2009, at the age of 37, she won the New York City Marathon, defeating of the likes of Paula Radcliffe, Lyudmila Petrova and Salina Kosgei.

In 2004 Derartu declined to enter the New York Marathon, where she would have been likely to face marathon World Record holder Paula Radcliffe, whom she has had a great rivalry with over the years, and focused instead on the Olympic Games, where she won the bronze medal in the 10 000 m behind Xing Huina and her cousin Ejegayehu Dibaba. (Radcliffe failed to finish.)

Derartu continued to run competitively in her late thirties, while most of her old rivals retired. Her last marathon finish came in 2011 in Yokohama.

She is remembered for her speed and her 60.3 second-last lap at the end of the 10,000 m at the Sydney Olympics was a sprint of note.