Born in Smethwick, West Midlands, England of Irish Catholic descent, Walters first became known as the occasional partner of comedienne Victoria Wood. Their series, Wood and Walters, appeared on television in 1982, and they have continued to perform together frequently over the years. One of Julie Walters' best-known roles is as "Mrs Overall" in Wood's spoof soap opera, Acorn Antiques.

Her first serious acting role on TV was in the classic Boys from the Blackstuff in 1980, and she broke into films with her sensational Academy Award nominated and BAFTA Best Actress award winning performance opposite Michael Caine in Educating Rita (1983), a role she had created on the West End stage.

Julie Walters has won numerous acting awards, and was made an OBE in 1999 for her services to the theatre. In 2001, she won a Laurence Olivier award for her performance in Arthur Miller's All My Sons.

She received her second BAFTA for her supporting role as the ballet teacher in Billy Elliot (2000). She often plays older women, and, in 2002, she won the BAFTA Television Best Actress award for her performance as Paul Reiser's mother in My Beautiful Son. Walters also played Molly Weasley in Harry Potter and the Philosopher's Stone (2001), Harry Potter and the Chamber of Secrets (2002),Harry Potter and the Prisoner of Azkaban (2004) and in the upcoming Harry Potter and the Order of the Phoenix (2007).

In 2004 Walters starred as a widow determined to make some good come out of her husband's death from cancer in Calendar Girls, which also starred Helen Mirren and Ciarán Hinds; in 2005, Walters again starred as an inspirational real-life figure in Ahead of the Class.