Varney was born and raised in Tucson, Arizona. She graduated as salutatorian from Rincon High School in 1993 and is an alumna of San Francisco State University where she majored in theater. She later pursued a career in interior design before eventually finding her way back into acting. Varney was raised Mormon, but left the church at 17 and now identifies as an agnostic. Varney is of English and Scottish descent.

She was in a relationship with Comedian Chris Hardwick from 2004 to 2011.

In 2005, Varney replaced Lisa Kushell as the hostess of the TBS cooking and entertainment show, Dinner and a Movie. She appeared alongside host Paul Gilmartin and chef Claud Mann in each episode introducing movies and injecting humor during the preparation of a creative dinner to go with some theme of the movie until the series' cancellation in 2011.

Varney was co-host of The Hollywood Show with Brian Unger, a recurring player on Norm Macdonald's Sketch show Back to Norm and an ensemble player on Crossballs, all for Comedy Central. She also starred in the short-lived FOX comedy Happy Hour. In 2007, Varney appeared in the short films Random Acts of Kindness, Die Hardly Working, Eternal Waters, Worldly Possession, The Losers, Keep Off Grass, and Dress For Success which were made during the reality show On the Lot. She has recently appeared as recurring character "Bev" for the web series Back on Topps with Randy and Jason Sklar. Starting in 2008, she began starring in the HBO television series Entourage, playing television Producer Amy Miller who works alongside Eric and Charlie. Varney was also cast in a movie called Best Player, starring opposite Jerry Trainor and Jennette McCurdy.