Born Hermione Ferdinanda Gingold in London, she was the daughter of a high-class Austrian-born Jewish financier Lionel Gingold and Kate Walters, an English-born housewife. Her mother must also have been Jewish since her marriage to Lionel in 1894 was conducted by the Chief Rabbi. On her father's side she was descended from the celebrated Solomon Sulzer, a famous synagogue cantor and Jewish liturgical composer in Vienna, who was a friend of composer Schubert and was made a freeman of the city on his 70th birthday. Gingold was a childhood friend of Noel Coward until her mother warned her away from him. First appearing on stage in 1909, she was originally a coloratura soprano and performed in Shakespearean dramas such as "The Merchant of Venice" and "Troilus and Cressida" and worked with Charles Hawtrey as an understudy. In the 1930s, her quirky, ribald comedic sense became famous through musical revues. She married British publisher Michael Joseph in 1918, with whom she had two sons, Stephen and Leslie. After her divorce in 1926, she married writer and lyricist Eric Maschwitz, whom she divorced in 1945. Gingold was also known for her unruly hair. It was said she styled it by sticking her head out the window and letting the wind sculpt it.

Gingold was introduced to U.S. servicemen during World War II through the London revue "Sweet and Low." After moving to the United States in 1951, Gingold became a great success there as well. She won a Golden Globe Award for Best Supporting Actress for her performance in the 1958 movie Gigi in which she played Madame Alvarez, a retired Parisian courtesan who was Gigi's grandmother and mentor. She sang "I Remember it Well" with Maurice Chevalier. She succeeded Jo Van Fleet as the monstrously possessive mother who is driving her son crazy in Jewish American playwright Arthur Kopit's Oh Dad, Poor Dad...Mama's Hung You in the Closet and I'm Feeling So Sad (1963) on Broadway and also in London, which role was played on film by Rosalind Russell.

Gingold played the mayor's snooty wife Eulalie Mackechnie Shinn in The Music Man (1962), starring Robert Preston and Shirley Jones, and was part of the original 1973 Broadway cast of A Little Night Music in the role of the elderly Madame Armfeldt, yet another former courtesan, this time Swedish, which she reprised in the unsuccessful film version of the musical.

In 1977, with conductor Karl Bohm, she won a Grammy Award for Best Album for Children for Prokofiev: Peter and the Wolf and Saint-Saëns: Carnival of the Animals. She was a regular guest on television talk shows, especially Jack Paar's, where audiences loved her stories. She is quoted as saying, "Fighting is essentially a masculine idea; a woman's weapon is her tongue." She died of heart problems and pneumonia in 1987 at the age of 89, although she disputed the year of birth (1897) assigned to her. She is interred in a crypt in the Great Mausoleum in Forest Lawn Memorial Park Cemetery in Glendale, California.

Her autobiography How to Grow Old Disgracefully was published posthumously in 1988.

She is noted for offering the following advice concerning airplane food: "Anything that's white is sweet; anything that's brown is meat; anything that's grey, don't eat."