Born in Old Westbury, New York, she was the daughter of investment banker Willard Dickerman Straight, and the wealthy Dorothy Payne Whitney. She was four years old when her father died in France of influenza during the great epidemic while serving with the United States Army during World War I. Following her mother's remarriage to British agronomist Leonard K. Elmhirst in 1925, the family moved to England. As such, Beatrice Straight was educated there and it was where she began acting in amateur theater. Returning to the United States she made her Broadway debut in a 1935 production of Bitter Oleander. She concentrated her attentions on her theater work, winning a Tony Award for her role as Elizabeth Proctor in the 1953 production of Arthur Miller's The Crucible.

She was married twice, first to Frenchman Louis Dolivet, a left-wing activist who became editor of the "United Nations World" magazine and later an Academy Award winning film producer. They divorced in 1949 and Beatrice Straight immediately married film and Broadway actor/producer Peter Cookson with whom she had two sons.

She worked infrequently in television and cinema, and is most remembered for her role as a devastated wife, confronted by her husband William Holden's infidelity in Network (1976). Although Straight was onscreen for a little more than 5 minutes, her performance was widely praised, and earned her an Oscar for Best Supporting Actress, the shortest Oscar-winning performance in film history. Further film and television performances include the role of the mother of Lynda Carter in the Wonder Woman series. She also played the role of the paranormal investigator, Dr Lesh in the film Poltergeist (1982), the most widely seen role of her film career.

She died from pneumonia in Los Angeles, California, aged 86. She was cremated.