Colón was born in Ponce, Puerto Rico on August 20, 1936. She was a young girl in the 1940s when her recently divorced mother moved the family to a public housing project called Residencial Las Casas in San Juan. She attended the Román Baldorioty de Castro High School in Old San Juan, where she actively participated in the school's plays. Her first drama Teacher, Marcos Colón (no relation) believed that she was very talented; with his help, she was permitted to observe the students in the drama department of the University of Puerto Rico. She was a good student in high school and was awarded scholarships that enabled her to enroll in the Dramatic Workshop and Technical Institute and also in The Lee Strasburg Acting Studio in New York City.

In 1953, Colón debuted as an Actress in Los Peloteros (The Baseball Players), starring Ramón (Diplo) Rivero, a film produced in Puerto Rico, and in which she played a character called "Lolita." That same year, Colón moved to New York City, where she was accepted by Actors Studio co-founder Elia Kazan after a single audition, thus becoming the Studio's first Puerto Rican member. In New York, Colón worked in theater and later landed a role on the soap opera Guiding Light. On one occasion she attended a performance of René Marqués' La Carreta (The Oxcart). That presentation motivated her to form the first Hispanic theater group, with the help of La Carreta's Producer, Roberto Rodríguez, called "El Circuito Dramático".

In the late 1960s, Colón founded The Puerto Rican Traveling Theater company on West 47th street in Manhattan, New York. The company presents Off-Broadway productions onsite and goes on tour. She was the Director of the company and she has appeared in these PRTT productions:

In 1954 she appeared on stage in "In The Summer House" at the Play House in New York City. Between 1954 and 1974, Colón made guest appearances in television shows such as Peter Gunn and Alfred Hitchcock Presents. She appeared mostly in westerns such as Gunsmoke, Bonanza, The High Chaparral, and Have Gun, Will Travel. Colón appeared in the 1961 film One-eyed Jacks as "the Redhead". In 1962, she was featured as the co-star in a teleplay written by Frank Gabrielsen, and produced for the TV series The DuPont Show of the Week. The title of the hour-long episode was "The richest Man in Bogota", and it aired on 17 June 1962. It starred Lee Marvin as Juan de Núñez, and Miriam Colón as "Marina" (not Medina-Saroté, as in the original H.G. Wells story, The Country of the Blind).

Colón was married to George Paul Edgar from 1966 until his death in 1976. Colón lived the final years of her life in Albuquerque, New Mexico with her second husband Fred Valle, whom she married in 1987.

In 1979, she starred alongside fellow Puerto Rican actors José Ferrer, Raúl Juliá, and Henry Darrow in Life of Sin, a film in which she portrayed Isabel la Negra, a real-life Puerto Rican brothel owner. In 1983, she played the mother of Tony Montana (played by Al Pacino) in Scarface. She was also cast as "María" in the 1999 film Gloria, which starred Sharon Stone. In 2013, Colón was cast in the role of Ultima, a New Mexico Hispanic healer, in the movie "Bless Me, Ultima" based on the novel by Rudolfo Anaya.

In 1993, Colón received an Obie Award for Lifetime Achievement in the Theater. In 2000, she received the HOLA Raúl Juliá Founders Award, presented by the Hispanic Organization of Latin Actors (HOLA).

Colón's biography, titled Míriam Colón: Actor and Theater Founder, was written by Mayra Fernandez in 1994.[9][10]

Colón died on March 3, 2017, at the age of 80, of complications from a pulmonary infection.