Sills was born Belle Miriam Silverman to first generation immigrants of Ukrainian and Romanian Jewish background. She was raised in a working-class neighborhood of Brooklyn, New York. As a child, she spoke Russian, Romanian and English.

When she was three years old, Sills won a "Miss Beautiful Baby" contest singing "The Wedding of Jack and Jill". Her mother was convinced of her musical talents, and she provided her daughter with lessons in dance, voice and elocution. In the 1930s, she performed professionally on radio and in the 1936 short film Uncle Sol Solves It. In 1936, Sills began taking lessons with Estelle Liebling, a famous singing teacher, who encouraged her to audition for CBS Radio's Major Bowes' Amateur Hour. On October 26, 1939, she was the winner of that week's program. Bowes then asked her to appear on his Capital Family Hour, a weekly variety show. Her first appearance was on November 19, 1939, the 17th anniversary of the show, and she appeared a number of times on the program thereafter (the dates of the first Bowes appearances are incorrect in most printed sources about Sills) .

In 1945, Sills made her professional stage debut with a Gilbert & Sullivan touring company and sang operetta for several years. In 1947, she made her operatic stage debut as the Spanish gypsy Frasquita in Bizet's Carmen with the Philadelphia Civic Opera. On September 15, 1953, she made her debut with the San Francisco Opera as Helen of Troy in Boito's Mefistofele. In 1955, she first appeared with the New York City Opera as Rosalinde in Strauss's Die Fledermaus, which drew raves from the newspaper critics. Her reputation was established with her performance of the title role in the New York premiere of Douglas Stuart Moore's The Ballad of Baby Doe.

In 1956, she married Peter Greenough, publisher of the Cleveland, Ohio newspaper, The Plain Dealer. She had two children with Greenough and, upon learning that one was virtually deaf and the other was mentally retarded, she temporarily retired from the stage in order to care for them.

Sills resumed her career in January 1964 when she sang the Queen of the Night in Mozart's The Magic Flute with the Opera Company of Boston. (Thanks to her formidable coloratura technique, Sills was greatly admired for her performance, but she herself was not fond of the role. She tells the story that she often spent the time between the main arias and the finale addressing holiday cards.)

In 1966, the New York City Opera revived Handel's then virtually unknown opera seria masterpiece Giulio Cesare and Sills' performance as Cleopatra made her an international opera star.

In subsequent seasons, Sills took on the roles of the Queen of Shemakha in Rimsky-Korsakov's Le Coq d'Or, Manon in Massenet's opera of that title, Donizetti's Lucia di Lammermoor, and the three female leads Suor Angelica, Giorgetta, and Lauretta in Puccini's trilogy Il Trittico. In 1969, she sang Pamira in Rossini's The Siege of Corinth, at La Scala.

In April 1975, Sills made her debut at the Metropolitan Opera in The Siege of Corinth, receiving an eighteen-minute ovation.

Although essentially a "lyric coloratura" as a voice type, Sills took on a number of heavier roles more associated with spinto sopranos as she grew older, including Violetta in Giuseppe Verdi's La Traviata and Gaetano Donizetti's Maria Stuarda, and Roberto Devereux. She was much admired for transcending the lightness of her voice with her dramatic interpretation, although it may have come at a cost; Sills later commented that Roberto Devereux "shortened her career by four years."

After Sills retired from the stage in 1980, she served as general director of the New York City Opera until 1991, where she helped turn what was then a financially struggling opera company into a viable enterprise. From 1994 to 2000, she was chairman of the Lincoln Center. She also devoted herself to various arts causes and such charities as the March of Dimes. She returned from retirement in 2002 to serve as chairman of the Metropolitan Opera, and resigned the position in January 2005, citing family as the main reason (she had recently had to place her husband, whom she had cared for over 8 years, in a nursing home). She stayed long enough to supervise the controversial appointment of Peter Gelb, known while at Sony Records for his doubts about the commercial potential for classical music, as the Met's General Manager.

During her illustrious operatic career, Sills recorded eighteen full-length operas. She also starred in eight opera productions televised on PBS and participated in such specials as Sills and Burnett at the Met, with Carol Burnett, Profile in Music, which won an Emmy Award, and A Conversation with Beverly Sills. In 1976, Sills published a memoir, Bubbles: A Self-Portrait (ISBN 0446815209). In 1987, she wrote Beverly: An Autobiography (ISBN 0553051733).