Anjelica Huston was born in Santa Monica, California, the daughter of film director John Huston (1906-1987) and his fourth wife, prima ballerina Enrica Soma (1930-1969). She has Scots-Irish, Scottish, English, and Welsh ancestry on her father's side, and Italian on her mother's side. One of four siblings, she was raised mainly in Ireland and England. She attended Kylemore Abbey, a prestigious all-girl boarding school in Connemara, Ireland as well as Holland Park School.

Two of Huston's first movies, Sinful Davey (1969) and A Walk with Love and Death (1969) were directed by her father. Although he disapproved of her ambitions to act, Anjelica received crucial but hurtful reviews for her performances. She would lose her mother in a car accident the same year; her father remarried Celeste Shane three years later. She appeared in only a few films over the next decade, moving to United States and pursuing a successful career in modeling.

Huston would again retreat to familiar roots, taking on small roles in films in the early 1980s: one in which she would star alongside Jack Nicholson and Jessica Langein Bob Rafelson's The Postman Always Rings Twice (1981), and Frances (1982), which would also star Jessica Lange Huston would also appear in television series, Laverne & Shirley and Faerie Tale Theatre.

After taking on several small but prominent roles in both film and in television, Huston landed her big role, winning an Academy Award for Best Supporting Actress for her role as Maerose Prizzi in Prizzi's Honor (1985), a film directed by her father, John Huston and starring opposite Jack Nicholson and Kathleen Turner. With Anjelica's win, she became the first third-generation Academy Award winner, having been preceded by her father and by her grandfather, actor Walter Huston.

Huston collaborated with her father again in The Dead, a film for which she was awarded an Independent Spirit Award. It was John Huston's final film before passing away in 1987.

Huston was nominated for another Academy Award for Best Supporting Actress for her role as Tamara Broder in Enemies, a Love Story (1989) and another for Best Actress in a Leading Role for her role as Lily Dillon in The Grifters (1990). She received three Saturn Award nominations for one of her most memorable roles, The Grand High Witch in The Witches (1990). Later she received nominations for her role as Morticia Addams in Addams Family Values (1993) and for her role as Baroness Rodmilla de Ghent in Ever After (1998).

Over the years, Huston received five Emmy Award nominations for her television work. She won a Golden Globe Award for Supporting Actress in a TV Program for Iron Jawed Angels (2004). It was her first win after eight nominations. She appeared in several films by Wes Anderson, starting with The Royal Tenenbaums (2001) and The Life Aquatic With Steve Zissou (2004), as well as The Darjeeling Limited (2007).

In January 2008, Huston joined the cast of Medium at the start of its fourth season for a six-episode story arc. Her character is an investigator who employs the psychic abilities of Allison DuBois. Her performance earned her a sixth Emmy nomination.

After a handful of prominent roles in both television and in film, Huston stepped away from acting, following in her father’s footsteps in the Director’s chair. The first film she directed was Bastard Out of Carolina (1996); another was Agnes Browne (1999), in which she both directed and starred, and Riding the Bus with My Sister (2005).