Isabella Rossellini is the daughter of Swedish actress Ingrid Bergmanand the Italian director Roberto Rossellini. She was born and raised in Rome, Santa Marinella, and Paris. At the age of 13, she was diagnosed with scoliosis. In order to correct it, Isabella had to undergo an 18 month ordeal of painful stretchings, body casts, surgery on her spine using pieces of one of her shin bones (used to add supports for the individual vertebrae without risking foreign body rejection issues), and a recovery from that surgery. Consequently, she has permanent incision scars on her back and shin. Incidentally, her daughter, Elettra, also developed scoliosis when she was a child.

At the age of 19, she came to New York, where she attended Finch College while working as a translator, a ringmaster at circuses and a RAI television reporter. She also appeared intermittently on Roberto Benigni's Italian comedy show, The Other Sunday. However, she did not decide to stay full time in New York until her marriage to Martin Scorsese(1979–1982). After her marriage to Scorsese, she married Jon Wiedemann (1983–1986), a German model (now a Microsoft executive), and gave birth to a daughter, Elettra. Later, she dated David Lynch, Gary Oldman and Gregory Mosher.

At the age of 28, her modeling career began, when she was photographed by Bruce Weber for British Vogue and by Bill King for American Vogue. During her career, she has also worked with many other renowned photographers, including Richard Avedon, Steven Meisel, Helmut Newton, Peter Lindbergh, Norman Parkinson, Eve Arnold, Francesco Scavullo, Annie Leibovitz, and Robert Mapplethorpe. Her image has appeared on such magazines as Marie Claire, Harper's Bazaar, Vanity Fair, and ELLE. Furthermore, in March 1988, an exhibition dedicated to photographs of her, called Portrait of a Woman, was held at the Musee d'Art Moderne in Paris.

Rossellini's modeling career led her into the world of cosmetics, when she became the exclusive spokesmodel for the international cosmetics brand Lancôme in 1982, replacing Nancy Dutiel in the United States and Carol Altin Europe. While there, in 1990, she was involved in product development for Lancôme's fragrance Trésor. Later, in 1995, she worked with the Coty Group and developed her own brand of cosmetics, Isabella Rossellini's Manifesto. However, in 1996, after 14 years with the company, she was infamously removed as the face of Lancôme for being "too old", since she was in her 40s at the time. She is signed to Trump Model Management.

Rossellini made her film debut with a brief appearance as a nun opposite her mother in the 1976 film A Matter of Time. However, she did not truly begin acting until the 1979 film Il Prato. She did not become successful with acting until after her mother's death in 1982, when she was cast in her first American film, White Nights (1985). Nonetheless, she is probably best known for her pivotal role as the nightclub singer Dorothy Vallens in David Lynch's Blue Velvet. Some other notable film roles include her work in Cousins, Death Becomes Her, Immortal Beloved, and Fearless.

In 2003, Rossellini had a recurring role on the television series, Alias. In that same year, she also appeared in the Canadian film The Saddest Music in the World directed by Guy Maddin. In 2004 she played as the High Priestess Thar in the Sci Fi Channel miniseries Legend of Earthsea. In addition, she acted in an Off-Broadway production of The Stendhal Syndrome. Furthermore, she became an ambassador for the Silversea Cruise Line, which has her appearing in print ads and on their website.

Rossellini received a 1987 Independent Spirit Award for Best Female Lead for her role in Blue Velvet. In 1997, she received two notable award nominations. She received a Golden Globe nomination for Best Performance by an Actress in a Mini-Series or Motion Picture Made for TV for her role in Crime of the Century and an Emmy Award nomination for Outstanding Guest Actress in a Drama Series for her work on the television series Chicago Hope.

Outside of acting, modeling, and cosmetics, Rossellini is involved in conservation efforts. She is a board member of the Wildlife Conservation Network. In addition, she is the president and director of the Howard Gilman Foundation, a leading institution focused on the preservation of wildlife, arts, photography and dance.

Rossellini has written three books. In 1997, her self-described fictional memoir, Some of Me, was published. In 2002, she released her second book, Looking at Me (on pictures and photographers). In 2006, In the name of the Father, the Daughter and the Holy Spirits: Remembering Roberto Rossellini was published and was accompanied by the Guy Maddin-directed short film My Dad Is 100 Years Old (both the film and the book are tributes to her father). In the film, she played almost every role, including David Selznick, Alfred Hitchcock, and her mother Ingrid Bergman