Born in Los Angeles, California, Lindley was the daughter of show business parents. She got her early start in Hollywood by being a stand-in, which eventually progressed to stunt work. Nothing panned out, and she went to New York in her mid-twenties to take her talent to the stage. Among her many Broadway plays were: On Golden Pond, Playhouse 90, Long Day's Journey into Night, Horse Heavens and many others. She took time off to get married and raise five children. Upon resuming her career, she began to make steady appearances on television, including a six-year stint as manipulative "Aunt Liz" Matthews on NBC soap Another World, and a regular role as Meredith Baxter's mother in the sitcom Bridget Loves Bernie.

Her greatest fame arrived when she began playing the wisecracking, perpetually unfulfilled and sexually frustrated "Helen Roper" on the hit sitcom Three's Company (1977) (Lindley wore a wig to maintain the character's exaggerated hairstyle). The character and her husband Mr. Roper (played by Norman Fell) were so popular that they were spun off to their own show, The Ropers (1979), which was not a success. Lindley continued to appear steadily on television and film. One of her last notable roles was a character part in the lesbian-themed film Desert Hearts (1985). Lindley wanted to retape one key scene. The director, Donna Dietch, replied that they did not have the budget for reshooting. Lindley said that she would buy a portion of the film if Dietch let her do just that one take again. Dietch agreed, and Lindley kept her word (the film went on to become a cult classic and make a solid profit). Lindley garnered further parts of all sizes in various TV films and series, the last being a recurring role on the CBS sitcom Cybill.

Lindley unexpectedly succumbed to leukemia on October 16, 1997 at the age of 79, a Cybill script by her hospital bedside.

She left behind her husband, actor James Whitmore, from whom she was separated, and their children and grandchildren.