Her life as a singer and comedy performer began early in her life. She was born backstage at a local vaudeville theatre in Butte, Montana where her Irish immigrant parents, Peter Reed and Maybelle Hooper, were performing as "Reed and Hooper". Two days after Martha was born, her mother was back doing the act, and Martha began performing in the act when she was three years old. She performed with her brother, Bud, and soon the two children became such a highlight that the act was renamed "Margie and Bud". She continued performing from that point on, and, once attended the Professional Children's School in New York City; but actually she received so little formal schooling, getting only as far as the fifth grade, that often she had to have scripts and other written documents read to her by others.

Martha Raye was best known for the size of her mouth, which appeared enormous in proportion to the rest of her face. It relegated her motion picture work to largely supporting comic parts. She became known as "The Big Mouth" and apparently she was often made up in a way which tended to cause it to appear as even larger than it actually already was. For example, she appears in the picture The Big Broadcast of 1938 where Bob Hope first sings what became his theme song, Thanks for the Memories; however, it is not sung to Ms. Raye, but rather to the female leading actress that she supports. Her title as "The Big Mouth" made her a natural to be the spokesperson for Polident denture cleanser in the 1970s and 1980s.

In the 1930s, Raye was a band vocalist with the Paul Ash and Boris Morros orchestras in the early 1930s. She made her first film appearance in 1934 in a band short titled "A Nite in the Nite Club". In 1936, she was signed for comedic roles by Paramount Pictures, and made her first picture for Paramount in 1936 in "Rhythm on the Range" with crooner Bing Crosby. Over the next 26 years, she would eventually appear with many of the leading comics of her day, including Joe E. Brown, Bob Hope, W.C. Fields, Abbott and Costello, Charlie Chaplin, and Jimmy Durante. She joined the USO soon after the US entered World War II.

During World War II, the Korean War, and the Vietnam War, she traveled extensively to entertain the American troops. She did so even though she had a life long fear of flying, but because of her profession was required to make numerous air trips.

In October 1966, she came to Soc Trang, Vietnam, to entertain the troops at this base that was the home base of the 121st Aviation company, the Soc Trang Tigers and the gun-ship platoon, The Vikings along with the 336th Aviation company. Shortly after her arrival, both units were called out on a mission to extract supposed POWs from an area nearby. Raye decided to hold her troop of entertainers there until the mission was completed so that all of the servicemen could watch her show. During that time, a serviceman flying a "Huey Slick" carrying troops recalls that his ship received combat damage to the extent that he had to return to base at Soc Trang.

As there were no replacements, the servicemen could not return to the mission. While the servicemen waited, Raye played poker with them and helped to keep everyone's spirits up. When the mission was completed, which had resulted in the loss of a helicopter gun-ship and a Viking pilot, there was also a wounded officer who had been wounded when that ship went down. When he and the two remaining crewmen were returned to Soc Trang, Raye volunteered to assist the doctor in treating the wounded flyer. When all had been completed, Raye waited until all were available and then put on her show. Everyone involved appreciated her as an outstanding trooper and a caring person. During the Vietnam War, she was made an honorary Green Beret due to the fact that she visited U.S. Army Special Forces in Vietnam without fanfare, and she helped out when things got bad in Special Forces A-Camps. As a result, she came to be known affectionately by the Green Berets as "Colonel Maggie". In 1968, she was given the Jean Hersholt Humanitarian Award, in the form of an Oscar. She received the Women's International Center (WIC) Living Legacy Award in 1988. In November of 1993, President Bill Clinton awarded her the Presidential Medal of Freedom.

Martha Raye was an early television star when that medium was very young; for a while she had her own program, The Martha Raye Show(1954 - 1956) in which she was the lead and her awkward boyfriend was portrayed by retired middleweight boxer Rocky Graziano. Other stars who appeared on her show included Zsa Zsa Gabor and Cesar Romero. Following the demise of her TV variety show, the breakup of her fifth marriage, and a series of other personal and health problems, she attempted suicide with sleeping pills on August 14, 1956. Well wishers gave her a St. Christopher's medal, a St. Genesius medal and a Star of David, and after her recovery she wore these faithfully, although she was neither Catholic nor Jewish. At the end of her TV programs she would also thank the nuns at the The Sisters of St. Francis Hospital in Miami, Florida where she recovered. She would always say, "Goodnight, Sisters" as a sign of appreciation and gratitude.

In 1970 she portrayed Boss Witch, the "Queen of all Witch-dom" in the film Pufnstuf. She often appeared as a guest on other programs, particularly ones that often had older performers as guest stars, such as The Love Boat and on variety programs. She also appeared for two years as Mel Sharples' mother, Carrie, on the sitcom Alice". She made guest appearances or did cameo roles in such TV series as "The Andy Williams Show", Murder, She Wrote, and McMillan and Wife. At one time, rumors circulated that Raye and Rock Hudson, the star of McMillan and Wife were romantically involved, but those rumors were obviously untrue in light of Hudson's homosexuality, of which Raye was very aware. She was never attracted to him sexually but did form a close friendship with him.

Raye's personal life was complex and emotionally tumultuous in that she was married seven times, with most of her marriages lasting less than two years and her first marriage lasting only three months. She was married to Hamilton "Buddy" Westmore from May 30, 1937 to September, 1937, filing for divorce on the basis of extreme cruelty; to conductor and composer, David Rose from October 8, 1938 to May 19, 1941; to Neal Lang from June 25, 1941 to February 3, 1944; to Nick Condos from March 9, 1944 to June 17, 1953--which resulted in the birth of her only child, Melodye Raye Condos on July 26, 1944; to Edward Thomas Begley from April 21, 1954 to October 6, 1956; to Robert O'Shea from November 7, 1956 to December 1, 1960; and to Mark Harris from September 25, 1991 until her death on October 19, 1994.

Her marriage to Harris in a quick Las Vegas ceremony made headlines. Martha was 75, and Harris was 42, and Raye had known Harris for less than a month. Harris was a self-proclaimed gay man and acknowledged that the marriage was never consummated. Also, it was apparent to many that Raye was already suffering from the dementia associated with advancing Alzheimer's disease, and other ailments which plagued her, and so the marriage was clearly an exploitive one in which Harris was motivated most by a desire for control of Raye's fortune and for publicity.

Also, a tug of war ensued between Martha's daughter Melodye and Mark Harris over Martha's possessions, her will, and eventually her burial. Raye left the bulk of her estate to Harris, with a portion going to People for the Ethical Treatment of Animals (PETA) as Raye was a great animal lover. Ironically, Harris used a large portion of his inheritance from Raye to fund his own line of furs for his fashion company.

Raye's had a grandson, Nicholas Lancaster, who was born to Raye's daughter, Melodye Condos Lancaster, in 1965.

Raye was deeply patriotic and, thanks to her work with the USO during World War II and subsequent wars, special consideration was given to bury her in Arlington National Cemetery upon her death.

She was buried with full military honors in Fort Bragg, North Carolina.

Raye has her own star on the Hollywood Walk of Fame.