Shelton was born in Los Angeles, California, the daughter of Carol (née Stromme), a Teacher and former singer, and Christopher Shelton, a Director and Producer. She is the second of four children; her sisters are Koren, Erin and Samantha Shelton (who is also an Actress and a musician). She grew up in the residential neighborhood of Eagle Rock, where she attended Eagle Rock High School. Shelton attended University of California, Los Angeles, where she majored in Film and Theatre. She studied with acting coach Larry Moss and also with Robert Carnegie, while supporting her career through mainly small parts in film and television in the early 1990s. Despite this, Shelton dropped out when she was cast in a leading role in the adventure film Warriors of Virtue.

She made her on-screen debut as Roberto's girlfriend at camp in Grand Canyon. She subsequently appeared in 1992's television movie Up to No Good playing Denise Harmon, and had several guest-appearances in episodes of shows such as Family Matters, Camp Wilder and Crossroads. Shelton found her profile raised significantly when she appeared in the 1993 film The Sandlot, playing the lifeguard Wendy Peffercorn. The movie received mixed feedback from critics and Writers and, budgeted at US$7 million, was a box office success with a worldwide gross of over US$33 million. It has since developed a cult following.

In 1994, she had a supporting part in Hercules in the Underworld, the fourth made-for-television movie in the series Hercules: The Legendary Journeys. The following year, she was cast in a minor role, as former President Nixon's adult daughter Tricia Nixon Cox, in Oliver Stone's acclaimed film Nixon, and guest-appeared in the television series Cybill episode "The Big Sleep-Over". Shelton next co-starred alongside Lynda Carter in When Friendship Kills (1996), a made-for-television film about anorexia nervosa among teens.

1997 saw Shelton appear in the romantic comedy Trojan War, opposite Jennifer Love Hewitt, and in the fantasy film Warriors of Virtue, as Princess Elysia. Both films rated poorly with reviewers and failed to attract the audiences, but James Berardinelli singled out Shelton for her performance in Warrior of Vitue, writing that her character is "the only one in the film that we develop any real interest in, and the script, apparently unable to deal with a personality having the potential to display more than one dimension, discards her perfunctorily and inelegantly".

A major film role came in 1998 with the fantasy comedy Pleasantville, in which she portrayed Margaret, the love interest of Tobey Maguire's character. The movie did not find a wide audience in theaters, but received an extremely positive reaction from critics. This role was followed by a number of other appearances in films aimed at a teenage audience, including her role as a member of a snobby high school clique in 1999's sleeper hit Never Been Kissed, a romantic comedy co-starring Drew Barrymore and David Arquette.

She appeared in another romantic comedy in 1999, which was The Bachelor, playing the sister of Renee Zellweger's character. A lukewarm commercial and critical reception greeted the film upon its release, but critic Dustin Putman stated that she "gives the only likable supporting performance". She also played one of the lead characters alongside Dennis Hopper in the independent drama Lured Innocence, and was cast by her Father in the short Protect-O-Man, a black comedy released in 1999 about "an agoraphobic whose disorder is augmented by a stalker on the prowl in her neighborhood", as described by Cinema Review.

After focusing on studio features, Shelton appeared in a variety of independent films during the early 2000s; she portrayed a troubled modern Dancer in Just a Kiss (2002), a dark comedy co-starring Kyra Sedgwick and Marisa Tomei, and followed with supporting parts in 2003's features Dallas 362 and Grand Theft Parsons, and a starring role in the low-budget drama Moving Alan – directed by her Father and in which her sister also appeared. In 2005, Shelton made a brief but notable appearance in the opening sequence of Frank Miller's graphic novel Sin City. The neo-noir thriller earned critical acclaim and grossed US$158 million worldwide. She had supporting characters in the 2006 films American Dreamz and The Last Kiss.

In the slasher thriller Valentine, Shelton appeared opposite Denise Richards as friends who are being stalked by an unknown assailant while preparing for Valentine's Day. Released one week after Sugar and Spice, the film grossed a modest US$36 million worldwide and was largely panned by critics, but Mick LaSalle for San Francisco Chronicle felt that the lead actors were "vivid, and the characters they play are clearly delineated", while he pointed out Shelton for having a "nice gravity" portraying her role. Her final film of 2001 was the dark comedy Bubble Boy, where she had the role of Jake Gyllenhaal's love interest. As Shelton's previous projects in the year, the film bombed with critics and audiences, but she was considered a stand-out; Robin Clifford for Reeling Reviews found her to be "charming" in her role.

In 2008, Shelton had a brief appearance in the biopic film about George W. Bush, W., directed by Oliver Stone, and took on her first full-time television role in CBS's Eleventh Hour, appearing as FBI Special Agent Rachel Young of the executive protection detail. The show earned mixed reviews, but Shelton received negative notes for her portrayal; Robert Bianco wrote for USA Today that she has "no character to play at all, or at least none that stays consistent between the two episodes made available for review", while Chicago Tribune remarked that her performance was "much less interesting" than co-star Rufus Sewell's and that whenever her character "opens her mouth, the show’s flaws come into sharp relief". The series was canceled after one season due to its inability to hold the CSI audience lead-in.

Shelton met film Producer Beau Flynn on the set of Bubble Boy in 2000 and married him in July 2001. Their first daughter, West Flynn, was born on September 6, 2009. She later recalled in an interview that they had chosen the name much before their child was born: “My husband actually dreamed seven years ago that we had a daughter, and he was calling her West. I immediately said, 'If we ever have a daughter, we’re definitely naming her that'". Ruby Jeanne, their second daughter, was born on May 1, 2012. When she is not acting, Shelton enjoys travelling, and has visited countries throughout Asia, South America and Africa. She also practices a regimen of yoga and pilates.

On April 30, 2010, Shelton was arrested for driving under the influence of alcohol. She was released the next day after posting a $5,000 bond. On May 21, 2010, Shelton pleaded no contest and was sentenced to two years probation and fined $240 plus penalties.

In the independent sport drama The Mighty Macs, Shelton reunited with Carla Gugino, taking on the role of Sister Sunday, a nun of Immaculata University and the assistant coach of Cathy Rush. The film was released in theaters in October 2011, more than three years after it was filmed, due to the difficulties of finding a distributor. It had a mixed critical and commercial reception, but reviewer Nell Minow, praised Shelton, writing that she "shows us how the sister’s faith supports her strength and integrity". She also had guest-roles in episodes of Harry's Law and Mad Men, in 2011 and 2013 respectively.

She appeared opposite Anthony Hopkins and Colin Farrell in the psychological thriller Solace, playing the wife of Jeffrey Dean Morgan's character. Filmed in 2013, Solace was released in most international markets throughout 2015 and 2016, grossing US$22 million, but due to financial problems at Relativity Media, the movie had a delayed premiere date in the US and did not arrive in theaters until December 2016. In the same month, Shelton–starred family made-for-television film Heaven Sent premiered on Lifetime. The film saw her star with Christian Kane portraying a couple on the verge of divorce while an eight-year-old runaway from heaven comes to save their relationship. In March 2017, NBC announced she will appear in the cast of their new drama series, 'Drama High', later renamed 'Rise'.

She dated actor Nicholas Brendon during her time in school. He was her prom date and bought Shelton 100 roses, wore a tux and drove a black convertible Mustang to impress her. She reportedly said later that he "totally did it right". While asked about her during a June 2014 talk with website Interviewly.com, Brendon described Shelton as "amazing, as she is today".