Born Margaret Yvonne Middleton in Vancouver, British Columbia, but known from childhood as Peggy, the daughter of an ambitious but unsuccessful aspiring actress of Italian descent, De Carlo was taken to Hollywood by her mother at the age of fifteen. She was "Miss Venice Beach" (1938). Unable to find work, they returned to Canada until 1940, when they once again traveled to Hollywood. De Carlo supported herself working in a chorus while trying to find film work. She made her first film appearance in 1941, but could only find bit parts for the next few years.

Her break came in 1945 playing the title role in Salome, Where She Danced. Though not a critical success it was a box office favorite and De Carlo was hailed as an up and coming star. In 1947 she played her first leading role in Slave Girl and then in 1949 had her biggest success. As the female lead opposite Burt Lancaster in Criss Cross, De Carlo played a femme fatale, and her career began to ascend. For the next several years, she was constantly working although many of the films failed to advance her career.

Cast in The Ten Commandments (1956) in a leading role (as Moses' wife), De Carlo was part of a major hit. The film was a huge success and De Carlo was among those to be praised for her restrained work.

However, her most famous role that led her to pop culture legacy is of "Lily Munster" in the cult television series The Munsters (1964 - 1966), and was able to demonstrate a comic flair that her films had failed to utilize.

She performed on Broadway, notably in the role of Carlotta Campion in the Sondheim musical Follies, of which show she is the sole lead female performer still living (having been predeceased by Alexis Smith, Dorothy Collins, Fifi D'Orsay, Ethel Barrymore Colt, Ethel Shutta).

She also received recognition for her work in various low-budget, horror movies, such as The Power, The Seven Minutes, House of Shadows, Sorority House Murders, Cellar Dweller, Mirror, Mirror, Blazing Stewardesses, and American Gothic.

De Carlo has worked steadily in both film and television, playing her most recent role in the television production of The Barefoot Contessa (1995).

She was married to the late stuntman, Bob Morgan, from 1955 to 1968 when they divorced; they had 2 sons, and Morgan had a daughter, Bari, from a previous marriage. DeCarlo is a naturalized citizen of the United States.

For her contribution to the motion picture industry, Yvonne De Carlo was honored with a star on the Hollywood Walk of Fame at 6124 Hollywood Blvd. and a second star at 6715 Hollywood Blvd. for her contribution to television.

The Power (1968), kept her before the eye of the movie going public. Yvonne's last big screen appearance was in 1993.