Born Patsy Louise Neal in Packard, Kentucky, she grew up in Knoxville, Tennessee. She studied drama at Northwestern University, then appeared on Broadway, winning a Tony Award for Another Part of the Forest. In 1949, she debuted in film opposite Ronald Reagan in John Loves Mary.

Her appearance that same year in The Fountainhead coincided with a long romantic affair with her much older co-star, Gary Cooper. The affair had begun two years earlier, in 1947, when Neal was only 21, and by 1950, Cooper's wife had found out and sent Neal a telegram: "I HAVE HAD JUST ABOUT ENOUGH OF YOU. YOU HAD BETTER STOP NOW OR YOU WILL BE SORRY. MRS. GARY COOPER".

Eventually the affair ended, but not before Cooper had gotten Neal pregnant, and then persuaded her to have an abortion. Guilty and scared, Neal ended the relationship, but not before Cooper's daughter, Maria (now Maria Cooper Janis) (born 1937), spat at her in public. Many years later, Maria Cooper and Neal would become friends.

After her affair with Cooper, Neal met writer Roald Dahl at a party in 1951. They married on July 2, 1953, at Trinity Church in New York. The marriage produced five children: Olivia Twenty (April 20, 1955 - November 17, 1962), who died of measles encephalitis, Chantal Sophia (renamed Tessa to avoid rhyme), Theo Matthew Roald, Ophelia Magdalena, and Lucy Neal.

Neal starred in The Breaking Point, The Day the Earth Stood Still and Operation Pacific before 1952. She suffered a nervous breakdown in that year when her affair with Cooper came to an end, but she recovered, and returned in 1957 to star in A Face in the Crowd.

She returned to Broadway in 1959 as the mother in The Miracle Worker. In 1963, Neal won the Academy Award for Best Actress for her performance in Hud, but was unable to attend the telecast that year. She returned to the big screen in 1968 to star in The Subject Was Roses, for which she was again nominated for an Oscar.

In February, 1965, Neal suffered three crippling strokes while pregnant with her daughter Lucy, leaving her unable to walk and even speak for a time. Roald took personal control of her rehabiliation and she was able to leave the hospital three months later.

On August 4, 1965, she successfully gave birth to her daughter. Dahl helped Neal through her rehabilitation, but began a relationship with Neal's then-best friend, Felicity Ann d'Abreu Crosland (born December 12, 1938). Neal and Dahl divorced on November 17, 1983, after 30 years of marriage.

Neal starred in the television movie The Homecoming: A Christmas Story, which proved to be the pilot episode for The Waltons. She did not, however, reprise her role of the mother in the series. She was offered the role of "Mrs. Robinson" in The Graduate, but turned it down, feeling it had come too soon after her stroke.

In 1978, Fort Sanders Regional Medical Center in Knoxville dedicated the Patricia Neal Rehabilitation Center in her honor. She has appeared in center advertisements through 2006. This center serves as part of Neal's paralysis victim advocacy.