Born in Omaha, Nebraska, she began her career on the stage. Her first film was Claudia, in which she played the character she had originated on Broadway, that of a child bride who almost destroys her marriage through her selfishness. By 1943, at the age of 27, she was already playing mother roles, in such movies as A Tree Grows In Brooklyn. She was nominated for the Academy Award for Best Actress in 1947 for Gentleman's Agreement.

She appeared in other film such as Three Coins in the Fountain, A Summer Place, Friendly Persuasion, Old Yeller, Swiss Family Robinson, Summer Magic and The Greatest Story Ever Told.

She died of heart disease at the age of 85 in 2001. The following March, 2002, a few months after her death, McGuire's family were hurt and disappointed when McGuire was mysteriously omitted from being included in the "In Memoriam" tribute at the 74th Academy Awards.

This is the segment that pays respect to those actors and artists involved in films that died in the previous year, but for unknown reasons the Academy has never given an explanation why she was omitted, despite the fact that McGuire was a previous Academy Award nominee for Best Actress in 1947.

It is possible that due to the confusion of the event of 9/11, they simply forgot. It bears pointing out that actresses Ruth Warrick, Anna Lee, Martha Scott and Geraldine Fitzgerald, were also left out of the tribute in their respective years, despite their many years of acting in all media.