Marchand was born in Buffalo, New York, to Raymond L. Marchand, a physician, and his wife, Marjorie Freeman, a Pianist. She was raised Methodist. She graduated from the Carnegie Institute of Technology (now Carnegie Mellon University) in 1949.

A talented member of the Actors Studio, Marchand made her Broadway debut in The Taming of the Shrew in 1951. Additional theatre credits include The Merchant of Venice, Love's Labour's Lost, Much Ado About Nothing, Forty Carats, And Miss Reardon Drinks A Little, The Plough and the Stars, The Glass Menagerie, Morning's at Seven, Awake and Sing!, The Octette Bridge Club, Love Letters, Man and Superman, The Importance of Being Earnest, The School for Scandal, The Balcony, for which she won a Distinguished Performance Obie Award, and Black Comedy/White Lies, for which she was nominated for the Tony Award for Best Performance by a Leading Actress in a Play. She was nominated four times for the Drama Desk Award, winning handily for Morning's at Seven. She won a second Obie for her performance in A. R. Gurney's The Cocktail Hour.

Marchand's feature film credits include Ladybug Ladybug, Me, Natalie, Tell Me That You Love Me, Junie Moon, The Hospital, The Bostonians, Jefferson in Paris, The Bachelor Party (1957), Brain Donors, Reckless, The Naked Gun, Sabrina, Dear God, and From the Hip (1986).

Marchand suffered from both lung cancer and emphysema and died on June 18, 2000 in Stratford, Connecticut, just one day before her 72nd birthday. Her character's death was written into the third season story line of The Sopranos. Her husband of 48 years, actor Paul Sparer had died the previous year, also from cancer. The couple had three children: Katie, an Actress, David (Rosebud), a Lawyer, and Rachel Sparer Bersier, an opera singer. Marchand was posthumously inducted into the American Theatre Hall of Fame.

On prime time television, Marchand was renowned for her roles as patrician newspaper publisher Margaret Pynchon on Lou Grant—winning four Emmy Awards as Best Supporting Actress in a Dramatic Series for her performance—and matriarch Livia Soprano, mother of Tony Soprano, on the HBO series The Sopranos, which earned her a Golden Globe Award for Best Performance by an Actress in a Supporting Role in a Series, Mini-Series or Motion Picture Made for Television and a Screen Actors Guild Award for Outstanding Performance by an Ensemble in a Drama Series. She appeared in many anthology series in the early days of television, including The Philco Television Playhouse (on which she starred in Marty opposite Rod Steiger), Kraft Television Theatre, Studio One, and Playhouse 90. Additional television credits include The Law and Mr. Jones, Spenser: For Hire, Law & Order, Homicide: Life on the Street, Coach, and Night Court. She played Hester Crane, mother of Frasier Crane, on an episode of Cheers.