Ullman was born in Slough, Berkshire, England to a Polish Catholic immigrant father and an English mother with Gypsy heritage. Her early appearances were in British TV sketch comedy shows with Rik Mayall in A Kick Up the Eighties and Three of a Kind with Lenny Henry and the English comedian David Copperfield. She also appeared with French and Saunders and Ruby Wax in Girls On Top.

In 1983, she had great success as a singer on the legendary punk label Stiff Records, although her style was more comic romantic than punk. She had six songs in the British Top 100 in less than two years, including her first hit "Breakaway" (famous for her performance with a hairbrush as a microphone); the international hit "They Don't Know" (which got to #2 and was written by label-mate Kirsty MacColl, who also sang backing vocals), and the Madness cover version "My Guy" (whose video featured the British politician Neil Kinnock, at the time the Leader of the Opposition).

Her songs were over-the-top evocations of 1960s and 1970s pop music with an 1980s edge, "somewhere between Minnie Mouse and The Supremes" as Britain's Melody Maker put it, or "retro before retro was cool", as a retrospective reviewer wrote in 2002. The video for "They Don't Know" featured a cameo from Paul McCartney; at the time Ullman was filming a minor role in McCartney's film Give My Regards To Broad Street. Her final hit was "Sunglasses" at the end of 1984. During this time, she was also a guest VJ on MTV in the United States. A year later, she donned a blonde wig and took the role of a promiscuous gold digger named Candice Valentine in the ITV sitcom Girls On Top but jumped ship after one series.

Ullman's U.S. television show, The Tracey Ullman Show, earned four Emmys and spawned The Simpsons, which was featured in very simple cartoon shorts (created by cartoonist Matt Groening at the behest of Ullman Show producer James L. Brooks). In 1992 Ullman filed a lawsuit against Twentieth Century Fox in Los Angeles Superior Court over profits from the later half hour incarnation of The Simpsons for $2.5 million out of the estimated $50 million in profits reaped from merchandising. Years after her show went off the air, she said jokingly in a late night television interview that she hoped to one day have a regular 2-minute spot on The Simpsons.

As Ullman has continued her professional relationship with former producer Brooks, only the studio and not Brooks was named in the suit. In fact, Brooks was allowed to videotape his testimony because in an only-in-Hollywood twist he was at that time directing Ullman in his later de-musicalized film I'll Do Anything. Ullman was unsuccesful and viewed by some as trying to greedily cash in on a project that she could not show in court that she had any hand in creating. However, supporters point out that she only sought a small portion of merchandising from the studios slice that she felt her contract for the cancelled show entitled her to (a 12 page contract that was hastily signed only hours before filming on the first The Tracey Ullman Show was to commence).

Ullman later appeared in Tracey Takes On... on HBO, which has been nominated and won several Emmy's including Outstanding Variety, Music or Comedy Series in 1997 for the episode "Vegas."

She has featured in many films, including I Love You to Death, Robin Hood: Men in Tights, Household Saints, Small Time Crooks, and A Dirty Shame. She was also the modern-day cartoon voice of Little Lulu. She also had a recurring role as Ally's unconventional therapist on the television series Ally McBeal.

Ullman returned to HBO in the summer of 2005, with a special of her autobiographical one-woman stage show, Tracey Ullman: Live and Exposed, which gained her another Emmy nomination. In 2005, she announced her intention to attain full US citizenship on The Daily Show with Jon Stewart, and on December 26, 2005, Tracey Takes On... The Complete First Season was released on DVD from HBO Home Video. The Complete Second Season of Tracey Takes On... will also get the DVD treatment, June 27, 2006, from HBO Home Video. The set will include 'extended takes,' extra footage from the series.

Tracey co-stars in the upcoming 2006 film, I Could Never Be Your Woman, starring Michelle Pfeiffer.

Ullman is due to publish a knitting book, with co-author, Mel Clark, Knit 2 Together: Patterns and Stories for Serious Knitting Fun, due in September 2006.

Ullman is married to producer Allan McKeown. They have two children, Mabel and Johnny.