Stanley was married four times: to Bruce Hall (1945–1946), Curt Conway (1949–1956), Alfred Ryder (1958–1964), and Joseph Siegel (1964–1967). All four marriages ended in divorce.

In the 1950s, Stanley was a prolific performer in television, and later progressed to film, with a well-received performance in The Goddess (1959). She was the narrator of To Kill a Mockingbird (1962), and starred in Séance on a Wet Afternoon (1964), for which she won the New York Film Critics Circle Award for Best Actress and was nominated for the Academy Award for Best Actress. She was less active during the remainder of her career; two of her later film successes were as the mother of Frances Farmer in Frances (1982), for which she received a second Academy Award nomination as Best Supporting Actress, and as Pancho Barnes in The Right Stuff (1983). She received a Primetime Emmy Award for Outstanding Supporting Actress – Miniseries or a Movie for her performance as Big Mama in a television adaptation of Cat on a Hot Tin Roof in 1985. That same year, Kim Stanley was inducted into the American Theatre Hall of Fame.

Stanley was a successful Broadway Actress with only a few film roles. She was singled out by The New York Times critic Brooks Atkinson for her early work. She eventually attended the Actors Studio, studying under Elia Kazan, Lee Strasberg, and Vivian Nathan. She received the 1952 Theatre World Award for her performance as Anna Reeves in The Chase, and starred in such Broadway hits as Picnic (1953), playing Millie Owens and Bus Stop (1955), playing Cherie.

Stanley was a leading lady of live television drama, which flourished in New York City during the 1950s. Among her many starring roles was Wilma, a star-struck 15-year-old girl from the U.S. Gulf Coast of Texas in Horton Foote's A Young Lady of Property, which aired on The Philco-Goodyear Television Playhouse on April 5, 1953. She was in the London performance of "Masha" in an Actors Studio production of Anton Chekhov's play The Three Sisters

Her first film was The Goddess (1958), playing a tragic movie star. She starred in Séance on a Wet Afternoon (1964), winning both the National Board of Review Award for Best Actress and the New York Film Critics Circle Award for Best Actress, and was nominated for the Academy Award for Best Actress and the BAFTA Award for Best Actress in a Leading Role.

She was nominated for the 1959 Tony Award for Best Actress in a Play for A Touch of the Poet and the 1962 Tony for Best Actress in a Play for her portrayal of Elizabeth von Ritter in Henry Denker's A Far Country. Stanley also portrayed Maggie "The Cat" in Cat on a Hot Tin Roof in the original London production of the play.

She received an Emmy Award for Outstanding Single Performance by an Actress in a Leading Role for her appearance in the episode, "A Cardinal Act of Mercy" (1963), of the television series, Ben Casey (1961–1966), and an Emmy Award for Outstanding Supporting Actress in a Limited Series or a Special for her appearance in the 1984 television adaptation of Tennessee Williams's Southern melodrama Cat on a Hot Tin Roof, this time as Big Mama.

A filmed version of Strasberg-directed Three Sisters (1966) opened with Stanley reprising the role of Masha, and is the only time one can see her perform in a film alongside Geraldine Page, Sandy Dennis, Shelley Winters and other well-known names of the Actors Studio. She was nominated for an Academy Award for Best Supporting Actress and a Golden Globe Award for Best Supporting Actress – Motion Picture for her performance as Frances Farmer's possessive mother in Frances (1982). She also played Pancho Barnes in The Right Stuff (1983). Stanley was the uncredited narrator in the drama film To Kill a Mockingbird (1962). As the narrator, she represents the character Jean Louise Finch ("Scout") as an adult. Mary Badham portrays Scout as a child in the film.

Stanley died of uterine cancer at a Santa Fe, New Mexico, nursing home at the age of 76. She was survived by her brother Justin, her three children, and several nephews and nieces. A biography, Female Brando: the Legend of Kim Stanley (2006), by Jon Krampner, was published by Back Stage Books, a division of Watson-Guptill.

She was inducted into the New Mexico Entertainment Hall of Fame in 2012.