Born in Chicago, Illinois, Douglas was one of four children born to Lois Mae Thompson and Donald Douglas, Sr. Raised by a single mother, Douglas grew up in a public housing complex on the city's south side. Douglas became interested in the arts as a child, citing 1965's The Sound of Music as her inspiration for acting. Douglas attended Thornton Township High School, graduating in 1975. After high school, Douglas studied at Illinois State University; graduating with a Bachelor of Arts degree. During her adult life, Douglas was a student in the Master’s Program in Jazz Vocals at the prestigious Manhattan School of Music; later earning a Master in Music degree.

Douglas has been married to neuro-radiologist Dr. Roy Jonathan Cobb since February 1989 and together they have one daughter. Douglas is an Honorary Member of Delta Sigma Theta sorority where she served on its board as the Honorary Co-Chair of the Commission on Arts and Letters for thirteen years. In the community, she is a lifetime member of Girl Scouts of America, The National Council of Negro Women, Sigma Alpha Lambda (a national leadership and honors organization) and Jack and Jill of America.

Douglas has numerous television guest star appearances, most recently Bull , Bones The Good Wife. Douglas has also appeared on The Parkers, The Cosby Show, Law and Order: Criminal Intent, NYPD Blue, and Touched by an Angel. On stage, Douglas performed the role of Jenny Diver in The Threepenny Opera starring Sting and Dr. Bearing in Wit, where she was the first African American to perform the role. Douglas is an Award winning actress: a two time Image Award winner, a Black Oscar, a Reel Award and the Mary Martin Award which was awarded to Douglas by Mary Martin. Douglas appears in the Rel Dowdell film, Changing the Game in 2011.