She designed thousands of book covers for countless writers in every genre of fiction and non-fiction, including Paul Auster, Thomas Pynchon, Salman Rushdie, Louise Ehrdrich, Sue Grafton, and John Fowles (among many others). Her early works appeared in The Village Voice and The New York Times Book Review, which eventually segued into her storied career as the art director of several major book publishing companies. She spent her junior year at The American University in Paris, where she traveled extensively before returning to NYC with an eye toward making her career in illustration. Palacio attended The High School of Art & Design in Manhattan, and then majored in illustration at the Parsons School of Design. Her birth name is Raquel Jaramillo (Palacio was her mother's maiden name). A first generation American (her parents were Colombian immigrants), Palacio was born on Jin New York City.
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