Journalist Robert Slatzer (who later claimed to have been secretly married to Marilyn Monroe) claimed that a few weeks before Vélez's death, he interviewed her at her home and she confided in him that she was pregnant with Gary Cooper's child (by that time, Cooper was married to socialite Veronica "Rocky" Balfe). According to Slatzer, Vélez said that Cooper refused to acknowledge the child, believing that Harald Ramond was the father. After Vélez died, Slatzer said he asked Cooper about the situation and Cooper confirmed that it was possible he might have been the father. Slatzer further claimed that he also interviewed Clara Bow (who had also dated Cooper in the 1920s), who revealed that shortly before Vélez's death, Cooper called her and screamed that he was going to kill Harald Ramond for impregnating Vélez. Slazter claimed that Bow told him that she never believed Vélez's baby was fathered by Ramond, and that she was convinced that Vélez had attempted to get Ramond to marry her to protect Cooper's reputation. Biographer Michelle Vogel speculated that if Cooper was the father, his rejection of Vélez and their child coupled with the idea of having to raise a child alone may have sent Vélez "over the edge".

In 1926, Frank A. Woodyard, an American who had seen Vélez perform, recommended her to stage Director Richard Bennett (the father of the actresses Joan and Constance Bennett). Bennett was looking for an Actress to portray a Mexican cantina singer in his upcoming play The Dove. He sent Vélez a telegram inviting her to Los Angeles to appear in the play. Vélez had been planning to go to Cuba to perform, but quickly changed her plans and traveled to Los Angeles. However, upon arrival, she discovered that she had been replaced on the play by another Actress.

After her debut in the short film Sailors, Beware!, Vélez appeared in another short film for Hal Roach, What Women Did for Me, opposite Charley Chase. Later that year, she did a screen test for the upcoming Douglas Fairbanks film The Gaucho. Fairbanks was reportedly impressed by Vélez and quickly signed her to a contract and hired her to appear in the film with him. Upon its release in 1927, The Gaucho was a hit and critics were duly impressed with Vélez's ability to hold her own alongside Fairbanks, who was well known for his spirited acting and impressive Stunts.

Vélez made her second major film, Stand and Deliver (1928), directed by Cecil B. DeMille. That same year, she was named one of the WAMPAS Baby Stars. In 1929, Vélez appeared in Lady of the Pavements, directed by D. W. Griffith and Where East Is East, playing a young Chinese woman. As she was regularly cast as "exotic" or "ethnic" women that were volatile and hot tempered, gossip columnists took to referring to Vélez as "Mexican Hurricane", "The Mexican Wildcat", "The Mexican Madcap", "Whoopee Lupe" and "The Hot Tamale".

Vélez was involved in several highly publicized and often stormy relationships over the course of her career. Upon arriving in Los Angeles, she was linked to actors Tom Mix, Charlie Chaplin and Clark Gable. Her first long-term, high-profile relationship was with actor Gary Cooper. Vélez met Cooper while filming The Wolf Song in 1929 and began a two-year affair with him. The relationship with Cooper was passionate but often stormy. When angered, Vélez reportedly physically assaulted Cooper. Cooper eventually ended the relationship in mid-1931 at the behest of his mother Alice who strongly disapproved of Vélez. By that time, the rocky relationship had taken its toll on Cooper who had lost 45 pounds and was suffering from nervous exhaustion. Paramount Pictures ordered him to take a vacation to recuperate. While he was boarding the train, Vélez showed up at the train station and fired a pistol at him.

Vélez's ire and jealousy was often targeted at fellow actresses whom she deemed as rivals, professionally or otherwise, a habit which began back in her vaudeville days and continued in films. Vélez's image was that of a wild, highly sexualized woman who spoke her mind and was not considered a "lady", while fellow Mexican Actress Dolores del Río projected herself as sensual but classy and restrained, often hailing from aristocratic roots. Vélez hated del Río, and called her "bird of bad omen". Del Río was terrified to meet her in public places. When this happened, Vélez was scathing and aggressive. Vélez openly mimicked del Río, ironically making fun of her elegance. Vélez also disliked Marlene Dietrich whom she suspected of having an affair with Gary Cooper while filming Morocco in 1930. Her rivalries with Jetta Goudal, Lilyan Tashman and Libby Holman were also well documented. In retaliation, Vélez would perform scathing impersonations of the women she disliked at Hollywood parties.

After her breakup with Cooper, Vélez began a short-lived relationship with actor John Gilbert. They began dating in late 1931 while Gilbert was separated from his third wife Ina Claire. They were reportedly engaged but Gilbert ended the relationship in early 1932 and attempted to reconcile with Claire.

In February 1932, Vélez took a break from her film career and traveled to New York City where she was signed by Broadway impresario Florenz Ziegfeld, Jr. to take over the role of "Conchita" in the musical revue Hot-Cha!. The show also starred Bert Lahr, Eleanor Powell and Buddy Rogers.

Shortly thereafter, Velez met actor Johnny Weissmuller while the two were in New York. After they both returned to Los Angeles, they dated off and on while Vélez also dated actor Errol Flynn. On October 8, 1933, Vélez and Weissmuller were married in Las Vegas. This relationship was also stormy with reports of domestic violence and public fights. In July 1934, after ten months of marriage, Vélez filed for divorce citing cruelty. She withdrew the petition a week later after reconciling with Weissmuller. On January 3, 1935, she filed for divorce a second time and was granted an interlocutory decree. That decree was dismissed when the couple reconciled a month later. In August 1938, Vélez filed for divorce for a third time again charging Weissmuller with cruelty. Their divorce was finalized in August 1939.

Upon her return to Mexico City in 1938 to star in her first Mexican film, Vélez was greeted by ten thousand fans. The film La Zandunga, was directed by Fernando de Fuentes and co-starred Mexican actor Arturo de Córdova. It was a critical and financial success and Vélez was slated to appear in four more Mexican films. She instead returned to Los Angeles and went back to work for RKO Pictures.

In 1939, Vélez was cast opposite Leon Errol and Donald Woods in a B-comedy The Girl from Mexico. Despite being a B film, it was a hit with audiences and RKO re-teamed her with Errol and Wood for a sequel, Mexican Spitfire. That film was also a success and led to a series of Spitfire films (eight in all). In the series, Vélez portrays "Carmelita Lindsey", a temperamental yet friendly Mexican singer married to Dennis "Denny" Lindsay (Wood), an elegant American gentleman. The Spitfire films rejuvenated Vélez's career. In addition to the Spitfire series, she was cast in another musical and comedy features for RKO, Universal Pictures, and Columbia Pictures Some of these films were Six Lessons from Madame La Zonga (1941), Playmates (1941) opposite John Barrymore and Redhead from Manhattan (1943). In 1943, the final film in the Spitfire series, Mexican Spitfire's Blessed Event was released. By that time, the novelty of the series had begun to wane.

After her divorce became final, Vélez began dating actor Guinn "Big Boy" Williams in late 1940. They were reportedly engaged but never married. In late 1941, she became involved with author Erich Maria Remarque. Actress Luise Rainer later recalled that Remarque told her "with the greatest of glee" that he found Vélez's volatility wonderful. He recounted to Rainier an occasion when Vélez became so angry with him that she took her shoe off and hit him with it. After dating Remarque, Vélez was linked to boxers Jack Johnson and Jack Dempsey.

In 1943, Vélez began an affair with her La Zandunga co-star Arturo de Córdova. De Córdova had recently moved to Hollywood after signing with Paramount Pictures. Despite the fact that de Córdova was married to Mexican Actress Enna Arana with whom he had four children, Vélez granted an interview to gossip columnist Louella Parsons in September 1943 and announced that the two were engaged. She told Parsons that she planned to retire after marrying de Córdova to "cook ... and keep house". Vélez ended the engagement in early 1944, reportedly after de Córdova's wife refused to give him a divorce.

On the evening of December 13, 1944, Vélez dined with her two friends, the silent film star Estelle Taylor and Benita Oakie. In the early morning hours of December 14, Vélez retired to her bedroom where she consumed 70 Seconal pills and a glass of Brandy. Her secretary, Beulah Kinder, found the actress' body on her bed later that morning. A suicide note addressed to Harald Ramond was found nearby. It read:

Vélez's death was recounted in the 1959 book Hollywood Babylon by Kenneth Anger. In Anger's retelling, Vélez planned to stage a beautiful suicide scene atop her satin bed, but the Seconal she took did not mix well with the "Mexi-Spice Last Supper" that she had eaten earlier that evening. As a result, Anger said she became violently ill. Instead of dying on her bed as planned, Anger claimed that a dazed Vélez stumbled to the bathroom to vomit, slipped on the bathroom floor tile and fell head first into the toilet, where she subsequently drowned. Anger claimed that Vélez's "chambermaid" Juanita found her mistress the next morning. Despite the fact that Anger's version of events contradicts published reports and the official ruling, his story became something of an urban legend and is often repeated as fact - it was recounted in the pilot episode of the television comedy series Frasier, and also referenced in an episode of The Simpsons. Vélez's biographer, Michelle Vogel, points out that it would have been "virtually impossible" for Vélez to have "stumbled to the bathroom" or even get off her bed after having consumed such a large amount of Seconal. Seconal, a barbiturate, is noted for being fast acting even in small doses and Vélez's death was likely instantaneous. Her death certificate lists "Seconal poisoning" due to "ingestion of Seconal" as the cause of death, not drowning. Further, there was also no evidence to suggest Vélez had vomited.

Vélez's off-screen exploits also served to blur the line between her onscreen persona and her real personality. After her death, Journalist Bob Thomas recalled that Vélez was a "lively part of the Hollywood scene" who wore loud clothing and made as much noise as possible. She attended boxing matches every Friday night at the Hollywood Legion Stadium and would stand on her ringside seat and scream at the fighters. Other stories circulated that supported the lusty and exhibitionist aspects of her image. There were reports that Vélez frequently lifted her skirt up while dancing at parties and also flashed people revealing that she did not wear underwear. Ruth Biery, a reporter for Photoplay magazine, later wrote that while visiting the Actress at home, she witnessed Vélez "parading before a mirror — showing off herself to herself as openly and unconsciously as small children show off before company."