Born Thelma McQueen in Tampa, Florida, she trained as a dancer and took her stage name from the "Butterfly Dance" after performing it in a production of A Midsummer Night's Dream.

McQueen made her first film appearance playing an uncredited bit part as a sales assistant in The Women in 1939 and later that year filmed what would become her most identifiable role - as Prissy, the young maid in Gone with the Wind, uttering the famous words: "I don't know nothin' 'bout birthin' no babies!" She continued to play maids and small parts in various films including Since You Went Away (1944), Mildred Pierce (1945) and Duel in the Sun (1946), but by 1947 had grown tired of the ethnic stereotypes she was required to play and ended her film career.

By 1950 she had played another racially-stereotyped role for two years on the television series Beulah, which reunited her with her Gone with the Wind co-star Hattie McDaniel.

Her acting roles after this were very few, and she devoted herself to other pursuits including study, and received a bachelor's degree in political science in 1975. She had one more role of some substance in the 1986 film The Mosquito Coast.