The Outsiders was born in New York City on January 22, 1965, to acting coach father Burt Lane and nightclub singer/centerfold Colleen Farrington. With those two for parents, it was almost genetically inevitable that Diane would possess a mix of acting ability, stunning good looks, and smoldering sexuality. The acting ability came almost as soon as she was born, and by age six Diane had made her stage debut in acclaimed theater director Andrei Serbian's Medea. Her performance so captivated Serbian that he continued to cast her in his productions for the next five years. By 1976 her reputation as a talented and capable child star landed her in Joseph Papp's productions of The Cherry Orchard and Agamemnon at the Lincoln Center in New York. Performing at such a distinguished venue meant that her reviews would be read throughout the United States, most notably in Hollywood.

Film director George Roy Hill cast young Diane to star opposite Sir Lawrence Olivier in his 1978 feature film A Little Romance. Despite the film's critical praise, its box office success was mediocre at best. But Olivier was very vocal in press interviews about how wonderful an actress his young co-star was. He even went so far as to call her the new Grace Kelly. Eventually, all of this media hype placed Diane on the cover of Time in August of 1979 at the age of fourteen. Expectations were running high for Diane's follow-up projects and none of them lived up to their promise. Touched by Love (1980), Cattle Annie and Little Britches (1981), National Lampoon Goes to the Movies (1981), Ladies and Gentlemen, the Fabulous Stains (1981), and Six Pack (1982) were all box-office duds.

With the shine of her star fading, Diane began to take on roles with smaller paychecks and bigger opportunities to grow as an actor. Roles in two Francis Ford Coppolamovies, Rumble Fish (1983) and The Outsiders (1983), proved that Diane was more than capable of taking on adult roles, and once again she was extremely hot property. Coppola even admitted to always having had a crush on her, even when she was a young actress. With studio executives falling over themselves to offer her a multiple-picture deal, she was offered the lead role in three big budget Hollywood epics. Perhaps trying to exercise some of the judgment she lacked as a child actor, she passed on the first picture. On paper, the movie seemed destined for failure: "a mermaid out of water story" starring an unknown TV actor. Sadly for Diane, the movie was the blockbuster success Splash and the actor she passed on was Tom Hanks. The movies she did accept were Streets of Fire (1984) and The Cotton Club (1984), both high-budget, high-profile failures. Diane spent the next three years in a self-imposed exile from acting, making her return in the little-known picture, The Big Town (1987). The film served as the formal beginning of her comeback, but it wasn't until 1989's Lonesome Dove that America welcomed her back as a star.

Desperate to avoid falling from grace again, Diane carefully selected smaller roles in "safe" films like 1992's Chaplin and 1993's Indian Summer. Since 1995, Diane began working in a series of big budget, high-profile films, such as Judge Dredd (1995), the Robin Williams vehicle Jack (in 1996, and incidentally directed by Francis Ford Coppola, and Murder at 1600 (1997). Though the films were all reasonably successful, none of them turned Diane into a household name. The string of films that has helped turn Diane into a major star began with her Spirit Award winning performance of a frustrated and adulterous 1960s housewife in A Walk on the Moon (1999). That role may have won her the industry acclaim, but it was her role in the $600 million plus grossing blockbuster A Perfect Storm, which brought her back to the public eye.

Since the runaway success of that film, Diane has put forth starring efforts in The Glass House (2001) and the box-office hit Hardball, which both opened on the same day, in 2001. Despite the success of those two films, it has been her role in the sexy thriller Unfaithful (2002) that looks to be the defining moment of her career. The film was tops at the box office and there are rumblings about a possible Oscar nomination for Lane's turn as Richard Gere's cheating wife. It seems that after twenty years of stop-and-go success, The Outsiders is finally fulfilling the starry prophecy that Time laid out for her back in August of 1979. As for her personal life, she has a daughter, Eleanor, with her ex-husband, actor Christopher Lambert.