De la Huerta was raised by her mother, along with her older sister Rafaela de la Paz (born November 5, 1981) in the New York City neighborhood of SoHo, located in Lower Manhattan. Her parents are Ricardo Ignacio de la Huerta y Ozores, the Spanish XVII Duke of Mandas and Villanueva (born November 17, 1944, in San Sebastián, Basque Country, Spain), and Judith Bruce (born October 23, 1946, in Minneapolis, Minnesota, United States). De la Huerta was born with recurrent cystic hygroma under her arm, which she has had treated with multiple surgeries. Her mother worked as an authority on birth control and women's issues in Third World countries. She attended private Saint Ann's School in the New York City borough of Brooklyn, with fellow student and Future fashion designer, Zac Posen, for whom she has since modeled. She also attended the performing arts camp Buck's Rock. De la Huerta spent summers with her father in Spain while attending high school.

De la Huerta began modeling in her adolescence and became a runway model before transitioning into film. She made her film debut with a small role in the 1998 romantic comedy The Object of My Affection, and the next year appeared opposite Michael Caine and Charlize Theron in The Cider House Rules.

In 2002, She appeared opposite Shane West and Mandy Moore in A Walk to Remember, an American coming-of-age romantic drama film based on the Nicholas Sparks' novel. The film opened at No. 3 at the U.S. box office raking in $12,177,488 in its opening weekend, behind Snow Dogs and Black Hawk Down. Even though not a critical success, it was a modest box office hit, earning $41,281,092 in the United States alone, and a sleeper hit in Asia. The total revenue generated worldwide was $47,494,916.

In 2007, de la Huerta was cast in the role of Linda for the film Enter the Void, a psychedelic melodrama set in neon-lit nightclub environments of Tokyo. Director Gaspar Noé found her after holding auditions in New York City. "I met Paz and I really liked her. She had the profile for the character because she likes screaming, crying, showing herself naked—all the qualities for it." The crew filmed in Tokyo from 19 October to 15 December 2007. Flashback scenes were shot in Montreal over the course of four weeks the following spring, until 16 May 2008.

In 2009, de la Huerta was cast in the HBO pilot Boardwalk Empire, set in Atlantic City during the Prohibition era, as Enoch "Nucky" Thompson's mistress, a former Ziegfeld Follies Dancer. On September 1, 2009, HBO picked up the series for an additional 11 episodes. The series premiered on September 19, 2010 and concluded on December 5, 2010. The first season was met with widespread praise. On the review aggregator website Metacritic, the first season scored 88/100 based on 30 reviews, indicating "universal acclaim." The American Film Institute named Boardwalk Empire one of the ten "best television programs of the year."

She said in an interview with Vanity Fair that Harvey Weinstein raped her on two separate occasions in 2010, once after demanding to enter her apartment and have a drink, and once showing up after she had been subjected to repeated phone calls and had been drinking. De la Huerta came forward to police in 2017, within the New York state statute of limitations for rape in the first degree, and the New York District Attorney’s Office is considering bringing charges against Weinstein.

In July 2011, de la Huerta signed on to play Abby Russell, the protagonist in the horror film Nurse 3D. Principal photography began in Toronto on September 6, 2011 and wrapped on October 21. Following completion, the film was shelved for two years before its rights were acquired by Lionsgate. Critical reception of the film has been mixed; the film holds a 55-percent "fresh" rating on Rotten Tomatoes (based on 20 reviews) while also holding a rating of 29 on Metacritic (based on 7 reviews). Much of the film's criticism centered upon the film's script, which Neil Genzlinger commented "doesn’t have any of the wit that a film like this needs to give it campy coolness." A sequel for Nurse had been rumored by de la Huerta on her Twitter page with her stating that Nurse 2 would start shooting soon. However, In 2015, it was reported that de la Huerta was suing the filmmakers, for ruining her career.

In 2014, she completed filming in Las Vegas for the movie Death in the Desert, cast as Margo and co-starring with Michael Madsen and Shayla Beesley. The film was directed by Josh Evans. The movie was inspired by the book Death in the Desert by Cathy Scott with the screenplay by John Steppling. The film premiered in October at the Tucson Festival of Films and was released in February 2016 by Osiris Entertainment. She had a supporting role in the 2014 Canadian horror film The Editor. Set in the 1970s, a film Editor gets embroiled in a string of murders, she played Josephine Jardin, the film editor's mentally-ill wife. The film received a mixed reception, with a 55 percent rating at Rotten Tomatoes. Mark L. Miller of Ain't it Cool News ranked it the 25th best horror film released between Oct 1 of 2014 & 2015, deeming it Astron-6's "most successful and entertaining film to date." She was also briefly seen playing a woman in a bikini who "crashes" an interview in Louis Theroux's 2015 documentary My Scientology Movie.

The next year, de la Huerta played Pepper in the drama film Bare, opposite Diana Agron. The film follows a young woman living in a small desert town in Nevada, who becomes romantically involved with a female drifter who leads her into a life of drugs, stripping, and psychedelic spiritual experiences. Director Natalia Leite wanted to cast two women who were willing to be totally raw and exposed on camera in the leading roles. She stated: "I wanted to find two women who were very different from each other to put those two contrasting energies together." The film had a world premiere at the Tribeca Film Festival on April 19, 2015. The film was scheduled to be released in a limited release and through video on demand on October 30, 2015. Rotten Tomatoes reports that 43 percent of seven surveyed critics gave the film a positive review; the average rating is 5.9/10. Frank Scheck of The Hollywood Reporter wrote that de la Huerta was perfectly cast for her role as Pepper, though the film has a "mundane storyline." John Stewart of The Slanted wrote, "The film is an wonderful departure for Glee’s Dianna Agron and her performance with Paz de la Huerta is sure to spark a lot more work in the Future for both rising stars."

Enter the Void holds a 70-percent approval rating on review aggregator website Rotten Tomatoes, based on 88 English-language reviews, with an average rating of 6.7/10. On Metacritic, the film holds a score of 69 out of 100, based on 19 critics, indicating "generally favorable reviews." Peter Bradshaw included the film in The Guardian's top 50 films of the decade so far, and gave it five stars out of five. In a 2016 international critics' poll conducted by BBC, three critics listed Enter the Void as one of the greatest motion pictures since 2000.