Born Alicia Pearce in New York City, Pearce was educated in Europe and returned to the US as an adult. She began working in nightclubs as a comedian and was cast in the Broadway production of On The Town. Gene Kelly was so impressed by her, that she became the only cast member to be included in the film version in 1949. Her comedic performance was well received by critics and public alike, and she was given her own television variety show. More movie roles followed, and she made appearances on Broadway, where she met her husband director Paul Davis during a production of Bells Are Ringing.

Pearce was also a good friend of actor and photographer Cris Alexander; When Alexander was working on the illustrations for Patrick Dennis's bestseller Little Me he asked Pearce to appear in the work as Winnie, the reform school friend of Belle Poitrine, the biography's subject. She also appeared as several characters in Dennis' and Alexander's later project, First Lady: My Thirty Days at the White House.

In 1964 she joined the cast of the television series Bewitched. As the nagging and nosy neighbor, Gladys Kravitz, Pearce's scenes were almost entirely reactions to acts of witchcraft she had witnessed at the house across the street. Her hysterical accusations against Samantha, played by Elizabeth Montgomery, and the disbelief of her husband Abner, played by George Tobias, provided a common thread through many of the series early episodes. Pearce was posthumously awarded an Emmy Award for this role.

Diagnosed with terminal cancer before the show began, Pearce kept her illness a secret, but died from ovarian cancer during the second season at the age of 48. Gladys Kravitz was played from 1966 until the end of the series by actress Sandra Gould.