Baker attended Greensburg Salem High School in Greensburg, Pennsylvania, where she was a debate team member and active in the marching band and school musicals. At 18, she moved with her family to St. Petersburg, Florida, where she attended St. Petersburg College (then St. Pete Junior College). After her first year in college, Baker began working as a magician's assistant on the vaudeville circuit and joined a dance company, working as a professional Dancer. In 1949, Baker won the title of Miss Florida Fruits and Vegetables. In 1951, Baker moved to New York City, where she rented a dirt-floor basement apartment in Queens. She worked as a nightclub Dancer and also took stint jobs as a chorus girl in traveling vaudeville shows, which took her to Windsor, Detroit, and New Jersey.

Baker resided mainly in New York City and Los Angeles throughout the 1950s and '60s before relocating to Rome to pursue her career there. Baker was mainly based in Palm Springs, California, throughout the 1990s and early 2000s. As of 2016, she resides in New York City. In February 2014, she served as maid of honor at longtime friend and former actor Patrick Suraci's wedding to his partner, Tony Perkins, in New York.

After appearing in television commercials for Winston cigarettes and Coca-Cola, Baker was featured in an episode of Monodrama Theater performing a monodramatic piece, which was broadcast in 1952 on the DuMont Network. The following year, she made her film debut with a small walk-on part in the musical Easy to Love (1953). This led to her landing roles in two Broadway productions: Roger MacDougall's Escapade in the fall of 1953, and Robert Anderson's All Summer Long, opposite Ed Begley, which ran from September to mid-November 1954. In 1955, she screen tested and auditioned for the lead role in Picnic, but lost the part to Kim Novak. She was also considered for the lead in Rebel Without a Cause (1955) after James Dean recommended her for the part to Director Nicholas Ray, which she turned down.

Baker has been married three times: She first married Louie Ritter in 1953, but the marriage ended within a year, after which she enrolled at the Actors Studio in New York City. Baker alleged that Ritter had raped her when she was still a virgin in the early stages of their relationship. Her second was to Director Jack Garfein, a Holocaust survivor she met at the Studio and for whom she converted to Judaism (having been raised a Catholic). They had one daughter, Blanche Baker (born 1956), also an actress; and a son, Herschel Garfein (born 1958), who is a Composer and faculty member at the Steinhardt School of Music at New York University. Garfein and Baker divorced in 1969. Baker also has six grandchildren.

A 1956 photograph by Diane Arbus depicts Baker onscreen in Baby Doll with a passing silhouette during a New York City theater screening of the film. She was also photographed by Andy Warhol in 1975 as part of his Polaroid portrait series, and is mentioned in his published diaries.

In spite of this, Baby Doll opened to strong box-office receipts, grossing $51,232 in its first week at the Victoria Theater. In support of Baker, Marilyn Monroe appeared at the film's premiere, working as an usherette to help bolster ticket sales, the proceeds of which were donated to the Actors Studio. Baker received immense critical praise for her performance. Variety said that her performance "captures all the animal charm, the naivete, the Vanity, contempt and rising passion of Baby Doll," while Bosley Crowther of The New York Times praised Baker's ability to exhibit "a piteously flimsy little twist of Juvenile greed, inhibitions, physical yearnings, Common crudities and conceits". Baby Doll established Baker as an A-list Actress and would remain the film for which she is best remembered. She was nominated for an Academy Award for Best Actress for her performance, a Golden Globe for Best Actress, and won a Golden Globe for Most Promising Newcomer, which she shared with Jayne Mansfield and Natalie Wood. The performance also earned her a Film Achievement Award from Look, as well as the title "Woman of the Year" in 1957 from Harvard University's Hasty Pudding Club. She appeared on the cover of Life Magazine in June 1956.

After her suspension with Warner Bros. was lifted, Baker appeared in william Wyler's Western epic The Big Country (1958). The film was well received by critics, though the shoot was described as "problematic": Baker was four months pregnant at the time and had to wear restraining garments, and Director Wyler reportedly had her on the verge of tears after forcing her to repeat the same take over 60 times, only to use the first one. She followed The Big Country with lead roles in two romances, portraying a nun in The Miracle (1959) co-starring Roger Moore, and in But Not for Me (1959), a comedy with Clark Gable. The New York Times praised Baker's performance in But Not for Me, saying: "Miss Baker, being a young lady who not only has looks but also can act, makes you understand why Mr. Gable would like to cheat a little bit on Father Time." She disliked The Miracle so much that she bought out her contract with Warner Bros., putting her in considerable debt. But Not for Me was made at Paramount.

Baker has a star on the Hollywood Walk of Fame at 1725 Vine Street, which was erected on February 8, 1960. In 2001, a Golden Palm Star on the Palm Springs Walk of Stars was also dedicated to her.

Baker went on to make the experimental film Something Wild (1961), directed by her then-husband Jack Garfein. In this independent production, she plays a young college student from the Bronx who is raped one night in St. James Park, and later held captive by a Manhattan mechanic (Ralph Meeker) who witnessed her subsequent suicide attempt. In preparation for her role, Baker lived alone in a boarding house in New York's Lower East Side, and gained employment as a department-store salesgirl; her method approach to the role was profiled in Life in 1960. Critical reaction to the film was largely negative, though Film Quarterly cited it as "the most interesting American film of its quarter," and the most underrated film of 1961. However, its controversial depiction of rape led to critical backlash and public criticism, and the film has been credited by historians as nearly halting Baker's career. The same year, she portrayed Gwen Harold in Bridge to the Sun (1961), a production by MGM based on the 1957 best-selling autobiography of a Tennessee-born woman who married a Japanese diplomat (portrayed by James Shigeta) and became one of the few Americans to live in Japan during World War II. While only a modest success at the box office, the film was well received by critics and was America's entry at the Venice International Film Festival.

After this, Baker appeared in the independent British-German film Station Six-Sahara (1962) as a woman who provokes tensions at an oil station in the Sahara Desert, as well as the blockbuster Western epic How the West Was Won (1962), opposite Debbie Reynolds and former co-stars Gregory Peck and Karl Malden. In addition to film acting, Baker also found time to appear again on Broadway, starring in the 1962 production of Garson Kanin's Come on Strong in the fall of that year. In 1963, Baker relocated permanently with then-husband Jack Garfein and their two children to Los Angeles, where she based herself for the next several years. She traveled to Kenya to film Mister Moses (1965), where publicized rumors spread that she and co-star Robert Mitchum were having an affair, which they both vehemently denied. Another story, now considered apocryphal, had it that a Maasai chief in Kenya offered 150 cows, 200 goats, sheep, and $750 for her hand in marriage. She subsequently appeared with Maasai warriors on the cover of Life's July 1964 issue.

Based on her Carpetbaggers performance, Levine began to develop Baker as a movie sex symbol, and she appeared posing in the December 1964 issue of Playboy. She was subsequently cast by Levine in the title roles of two 1965 potboilers— Sylvia, as an ex-prostitute and con Artist, and as Jean Harlow in Harlow. Baker appeared on the cover of the Saturday Evening Post on their November 2, 1963, issue dressed as Harlow, promoting the film's upcoming production. In 1965, she became an official Celebrity spokesperson for Foster Grant sunglasses and appeared in advertisements for the company. Baker likened this era of her career to "being a beauty contest winner [as opposed to] an Actress."

Baker portrayed a pacifist Quaker schoolteacher in John Ford's Cheyenne Autumn (1964), and received critical acclaim for the role. She then had a supporting role as Saint Veronica in George Stevens' The Greatest Story Ever Told (1965), and portrayed a cynical, alcoholic movie star in The Carpetbaggers (1964), which brought her a second wave of notoriety in spite of the film's lackluster reviews. The New York Times called the film "a sickly sour distillation" of the source novel, but said Baker's performance "brought some color and a sandpaper personality as the sex-loaded widow." The film was the top moneymaker of that year, with domestic box-office receipts of $13,000,000, and marked the beginning of a tumultuous relationship with the film's Producer, Joseph E. Levine.

Despite much prepublicity, Harlow received a lukewarm response from critics: Variety referred to Baker's portrayal of Harlow as "a fairly reasonable facsimile, although she lacks the electric fire of the original." Relations between Baker and Levine soured; in a 1965 interview, Baker sardonically commented: "I'll say this about Joe Levine: I admire his taste in leading ladies," which led the press to suspect a rift between the Actress and Producer. Baker sued Levine over her contract with Paramount Pictures in 1966, and was ultimately fired by Paramount and had her paychecks from Harlow frozen amid the contentious legal dispute; this left Baker hundreds of thousands of dollars in debt (however, she was eventually awarded $1 million in compensation).

Baker separated from her second husband, Jack Garfein, in 1967, and moved to Europe with her two children to pursue a career there after struggling to find work in Hollywood. Eventually settling in Rome, Italy, Baker became fluent in Italian and spent the next several years starring in hard-edged Italian thrillers, exploitation, and horror films. In 1966, Baker had been invited to the Venice International Film Festival, where she met Director Marco Ferreri, who asked her to play the lead role in Her Harem (1967). This was followed with the horror films The Sweet Body of Deborah (1968) and The Devil Has Seven Faces (1971). Baker also starred in So Sweet... So Perverse (1969), Paranoia (1969), A Quiet Place to Kill (1970), and Il coltello di ghiaccio (Knife of Ice) (1972), all horror films directed by Italian filmmaker Umberto Lenzi.

She followed her roles in Lenzi's films with a leading role in Corrado Farina's Baba Yaga (1973) as the titular witch, alongside Isabelle De Funès and George Eastman. TV Guide referred to the film as an "exceptionally handsome Example of 1970s Italian pop-exploitation filmmaking sweetened by Piero Umilani's lounge-jazz score," and praised Baker's performance, but noted that she was "physically wrong for the role; her elaborate lace-and-beribboned costumes sometimes make her look more like a fleshy Miss Havisham than a sleekly predatory sorceress".

In an interview with Rex Reed in his book People Are Crazy Here (1974), Baker revealed that she had felt pressure in both her working relationship with Levine, and her domestic life with her husband, the latter of whom she said wanted to maintain an expensive lifestyle: "We'd been very poor when we started out at the Actors Studio in New York," she told Reed. "I was under contract to Joe Levine, who was going around giving me diamonds and behaving like he owned me. I never slept with him or anything, but everyone thought I was his mistress." In the spring of 1966, Baker returned to theatre, performing in a production of Anna Christie at the Huntington Hartford Theater in Los Angeles. The production was directed by Garfein. The production was heralded as the "theatre event of the week" in Los Angeles, though its reception was middling. Cecil Smith of The Los Angeles Times wrote of the production: "The beautiful Miss Baker's vehicle becomes a hearse." The play was also performed at the Tappan Zee Playhouse in Nyack, New York in June 1966.

Baker married her third husband, British theater actor Donald Burton, on March 10, 1978, and resided in Hampstead, London, in the 1980s. The couple remained together until Burton's death from emphysema at their home in Cathedral City, California, on December 8, 2007.

She followed Bad with a part in the low-budget surrealist thriller The Sky Is Falling (1979) with Dennis Hopper, playing a washed-up Actress living among expatriates in a Spanish village. The 1970 also had a return to the stage for Baker, where she appeared in British theater productions of Bell, Book, and Candle; Rain, an adaptation of a story by W. Somerset Maugham; Lucy Crown, an adaptation of the novel by Irwin Shaw; and Motive. In 1978, while touring England and Ireland in productions of Motive, Baker met stage actor Donald Burton, who became her third husband. She also appeared in American stage productions of Georges Feydeau's 13 Rue de l'Amour, Forty Carats, and Goodbye Charlie.

By the '80s, Baker had largely become a character actor, and was based in London. She starred in a supporting role in the 1980 Walt Disney-produced horror film, The Watcher in the Woods, alongside Bette Davis, after having been asked by British Director John Hough, a longtime admirer of her work. After an appearance in the British television film Red Monarch (1983), she played the mother of murdered Playboy model Dorothy Stratten (played by Mariel Hemingway) in the biopic Star 80 (1983). She also appeared as the mother of Sigmund Freud in the comedy The Secret Diary of Sigmund Freud (1984) with Carol Kane and Klaus Kinski.

Baker's role in Baby Doll was one that would come to be career-defining, and her association with both the film and character remained consistent throughout her career. In a 1983 article by People magazine, "Baby Doll" was referred to as Baker's "middle name." The film, adapted originally from Tennessee Williams' one-act play 27 Wagons Full of Cotton, has been performed on stage into the 21st century: It had its theatrical debut in 2000, and has been performed numerous times since. Baker's performance of the role was credited in Vanity Fair as marking a significant cultural interest in the ingénue in American cinema.

Baker featured in Jim Goddard's Hitler's SS: Portrait in Evil (1985), a coming-of-age drama set against Nazi Germany, as well as in the drama Native Son (1986), based on the novel by Richard Wright, which also featured Matt Dillon, Geraldine Page, and a young Oprah Winfrey. In it, Baker plays a 1930s Chicago housewife and mother of a teenaged girl who is accidentally killed by an African American chauffeur, who attempts to cover up the accident. Critic Roger Ebert praised Baker's performance in the film, noting her "powerful" scene with Winfrey during the film's finale.

Following Native Son, Baker had a critically acclaimed lead role as the wife of a schizophrenic drifter (played by Jack Nicholson) in Ironweed (1987), alongside Meryl Streep. Her performance in the film was again praised by Roger Ebert, who said: "Nicholson's homecoming [in the film] is all the more effective because Carroll Baker is so good as his wife ... she finds a whole new range. It may seem surprising to say that Baker holds the screen against Jack Nicholson, and yet she does".

In 1990, Baker played the role of Eleanor Crisp—described by Roger Ebert as "an effective bitch on wheels"— in Ivan Reitman's comedy Kindergarten Cop, starring Arnold Schwarzenegger, which she filmed in Astoria, Oregon, in the summer of 1990. The film was a huge financial success, grossing over $200 million worldwide. Her film and television work continued throughout the '90s, and she acted in many made-for-television movies, including the true-crime story Judgment Day: The John List Story (1993), Witness Run (1996), and Dalva (1996) with Farrah Fawcett.

In addition to her work in big-budget productions, Baker also appeared in small, independent films, such as Just Your Luck (1996) and Nowhere to Go (1997). The '90s also had Baker more frequently appearing on television series, including episodes of Grand (1990), Tales from the Crypt (1991, opposite Teri Garr in a segment directed by Michael J. Fox), Murder, She Wrote and L.A. Law (both 1993); Chicago Hope (1995), and Roswell (1999). In 2000, she appeared in the Lifetime film Another Woman's Husband. In 2002, Baker appeared in the documentary Cinerama Adventure, and guest-starred on an episode of The Lyon's Den, playing Rob Lowe's mother. Her role on The Lyon's Den was Baker's last screen appearance before she formally retired from acting in 2003. Her acting career spanned 50 years, and more than 80 roles in film, television, and theater.

In 1997, Baker was cast in a supporting role in David Fincher's thriller The Game, in which she plays a housekeeper to a Billionaire San Franscisco banker (played by Michael Douglas) who becomes embroiled in a sadistic game by his antagonistic brother, played by Sean Penn. In an interview with The New York Post following the film's release, Baker commented on her role, saying: "It's an important movie and I'm honored to be in it. Of course, I'd like to be the romantic lead, and I'm actually closer to Michael's [Douglas] age than Deborah Kara Unger is, [but] I think it's always worked that way in Hollywood. When I was in my 20s, I played opposite Jimmy Stewart, Robert Mitchum, and Clark Gable, all of whom were old enough to be my father." The Game proved to be a major success among Baker's later films, performing successfully at the box office and garnering widespread critical acclaim.

She has, however, sometimes participated in retrospective documentaries, including an interview for the 2006 DVD release of Baby Doll, which includes a documentary featuring Baker reflecting on the film's impact on her career. Baker has also been featured in documentaries about several of her co-stars, including Clark Gable, Roger Moore, Sal Mineo, and James Dean, including the 1975 James Dean: The First American Teenager, and a 1985 BBC Radio 2 tribute marking the 30th anniversary of the actor's death. Her memories of James Dean at the Actors Studio and later in Giant were recalled on BBC Radio 2 in 1982, when she guested on You're Tearing Me Apart, Terence Pettigrew's documentary which commemorated the 25th anniversary of Dean's death in a car accident in 1955. Also on the program were singer-actor Adam Faith and the Screenwriter Ray Connolly.

In 2011, Baker attended the Tennessee Williams/New Orleans Literary Festival in celebration of Williams' 100th birthday. There, she participated in a panel with Rex Reed, where she discussed her experiences with Williams and performing in Baby Doll. In 2011 and 2012, she was awarded Lifetime Achievement Awards from the Hoboken and Fort Lauderdale International Film Festivals.

Baker's first American film in over 10 years came in the Andy Warhol–produced black comedy Bad (1977), in which she plays the lead role of a Queens beauty salon owner who provides hitmen with jobs, starring alongside Susan Tyrrell and Perry King. "You can hardly call making an Andy Warhol movie a 'comeback'," said Baker. "It's more like going to the moon! The subject is totally unique."

Many of these films feature her in roles as distressed women, and often showed Baker in nude scenes, which few major Hollywood actors were willing to do at the time. Baker became a favorite of Umberto Lenzi, with her best-known role being in the aforementioned Paranoia, where she played a wealthy widow tormented by two sadistic siblings. In his review of Paranoia, Roger Ebert said: "Carroll Baker, who was a Hollywood sex symbol (for some, it is said) until she sued Joe Levine and got blacklisted, has been around. She may not be an Actress, but she can act. In The Carpetbaggers, there was a nice wholesome vulgarity to her performance. She is not intrinsically as bad as she appears in Paranoia. I think maybe she was saying the hell with it and having a good time." As with Paranoia, the majority of the films she made in Italy received poor critical reception in the United States, though they afforded Baker—who had left Hollywood in debt and with two children to support— an income, as well as fame abroad. In retrospect, Baker commented on her career in Italy and on her exploitation film roles, saying: "I think I made more films [there] than I made in Hollywood, but the mentality is different. What they think is wonderful is not what we might ... it was marvelous for me because it really brought me back to life, and it gave me a whole new outlook. It's wonderful to know about a different world."