Keener, the third of five children, was born in Miami, Florida, the daughter of Evelyn and Jim Keener, a manager of an automotive store. She is of Irish descent on her father's side and of Lebanese descent on her mother's. Keener attended Immaculate Conception Catholic School in Hialeah, Florida. Although she didn’t get into trouble growing up, by the time she reached high school at Monsignor Edward Pace High School, Keener began rebelliously acting out. She was eventually expelled from the 11th grade, although she later returned to school, and kept her grades up enough to be accepted into college. She attended Wheaton College, in Norton, Massachusetts and majored in English and history, enrolling in a theater course only when she was unable to get into a photography class.

Keener officially broke into films with one line in About Last Night (1986). Although she struggled professionally over the next few years one low-quality project had an unexpected dividend. Keener met her future husband, actor Dermot Mulroney in 1987 while working on Survival Quest (1989).

She also guest-starred as an artist on an episode of Seinfeld, called "The Letter". She played Jerry's girlfriend, an artist who painted the infamous portrait of Kramer. Keener then earned her first starring role in Johnny Suede with the then unknown, Brad Pitt. Her performance gained critical acclaim and she earned her first Independent Spirit Award nomination for Best Female Lead. She went on to work with director Tom Dicillo, again, in Living in Oblivion (1995). Two years later she was once again nominated for an Independent Spirit Award for her performance in Walking and Talking, an independent cult-comedy film. Critics fell in love with Keener's naturalness onscreen.

In 2000 Keener earned her first Oscar nomination for Best Supporting Actress for her role in Being John Malkovich. In 2001, she again worked with director Nicole Holofcener in Lovely and Amazing garnering her a third Independent Spirit Award nomination. In 2005, she made a huge comeback starring in the political thriller The Interpreter, The Ballad of Jack and Rose, opposite Daniel Day-Lewis, and was cast the love interest of the main character in The 40-Year-Old Virgin. Keener's performance as writer Harper Lee in Capote (also 2005) earned her several awards and nominations, including her second Oscar nomination for Best Supporting Actress. In 2006, she starred in the film Friends with Money, directed by Nicole Holofcener.

In 2007, Keener played Jan Burres in Sean Penn's critically acclaimed film Into the Wild, based on Jon Krakauer's best-selling book of the same name. In 2008, her film An American Crime, the true story of Gertrude Baniszewski, a middle-aged mother who tortured and killed Sylvia Likens in her Indiana home, will be aired on Showtime. Keener plays Baniszewski. Her protrayal earned her an Emmy nomination in the Best Actress TV Mini-Series or Movie category.