Deneuve was born Catherine Fabienne Dorléac in Paris, one of four daughters of French stage and film actor Maurice Dorléac and actress Renée Deneuve. Catherine made her screen debut at the age of 13, with a role in the 1956 film Les Collégiennes, and went on to make several films with directors such as Roger Vadim before getting her breakthrough role in Jacques Demy's musical Les Parapluies de Cherbourg (1964).

The burst of stardom that accompanied Deneuve's portrayal led to two of her archetypal ice-maiden roles, first in Roman Polanski's Repulsion in 1965 and then in Buñuel's 1967 Belle de Jour. Deneuve's startling portrayal of an icy, sexually adventurous housewife in the latter film helped to establish her as one of the most remarkable and compelling actresses of her generation. She further demonstrated her talent that year in Demy's Umbrellas musical follow-up, Les Demoiselles de Rochefort, which she starred in with her sister, Françoise Dorléac.

Deneuve continued to work steadily through the 1960s and 1970s in films such as the 1970 Tristana (her second collaboration with Buñuel) and A Slightly Pregnant Man (1973), in which she starred with Marcello Mastrioanni. Deneuve chose to avoid Hollywood, limiting her appearances in American films to The April Fools (1969) and Hustle (1975). Deneuve also did prolific work throughout the 1980s, appearing in such films as François Truffaut's Le Dernier métro (1980) and Tony Scott's The Hunger (1983). The latter saw Deneuve playing a bisexual vampire alongside David Bowieand Susan Sarandon her performance won her indelible cult status in the States among lesbians and goths.

In the 1990s, Deneuve garnered further international acclaim for her roles in several films, including 1992's Indochine (for which she won a César Award for Best Actress and received an Academy Award nomination for Best Actress) and two films directed by André Téchiné, Ma saison préférée (1993) and Les Voleurs (1995). In 1994 she was Vice President on the jury of the Cannes Film Festival. In 1998, she won acclaim and the Volpi Cup at the Venice Film Festival for her performance in Place Vendôme. Closing out the final years of the 1990s Deneuve remained consistently working in numerous films; in 1999 alone she appeared in no less than five films: Est-Ouest, Le temps retrouvé, Pola X, Belle-maman, and Le vent de la nuit, continuing to turn in compelling performances.

In 2000, Deneuve received much critical attention when cast alongside eccentric Icelandic singer Björk in Lars von Trier's melancholy musical Dancer in the Dark. Though it polarized critics and audiences alike, Dancer in the Dark nevertheless won the Palme d'Or at the Cannes Film Festival. In 2002, she shared the Silver Bear Award for Best Ensemble Cast at the Berlin International Film Festival for her performance in 8 Women. In 2005, Deneuve published her diary A l'ombre de moi-meme (In My Shadow); in it she writes about her experiences shooting the films Indochine and Dancer in the Dark. In 2006, she headed the jury at the Venice Film Festival. Deneuve continues to work steadily making at least two or three films per year.