Etheridge is famous as a gay rights activist, having come out publicly as a lesbian in January 1993 at the Triangle Ball, a gay/lesbian celebration of President Bill Clinton's first inauguration. She is also a committed advocate for environmental issues and in 2006, she toured the US and Canada using biodiesel.

Etheridge had a long-term partnership with Julie Cypher, which made headlines. During this partnership, Cypher gave birth to two children, Bailey Jean, born February 1997, and Beckett, born November 1998, fathered by sperm donor David Crosby.

In 2000, Cypher began to reconsider her sexuality and on September 19, 2000, Etheridge and Cypher announced they were separating. In 2001, Etheridge documented her breakup with Cypher and other experiences in her memoir The Truth Is... My Life in Love and Music. In the book, Etheridge recounts that she was molested by her sister, Jennifer, over five years as a child, and mentions an alleged affair Cypher had with k.d. lang.