Swinton was born in London. Her mother, Judith Balfour, was Australian, and her father, Major-General Sir John Swinton of Kimmerghame, Berwickshire, KCVO, is Scottish. The Swinton family is an ancient Anglo-Scots family that can trace its lineage to the ninth century. Swinton attended West Heath Girls' School (the same class as Diana, Princess of Wales), and also Fettes College for a brief period. In 1983, she graduated from Murray Edwards College (known previously as New Hall) at Cambridge University with a degree in Social and Political Sciences. She has two Honorary Doctorates: one from Napier University in Edinburgh, received in August 2006 and one from the Royal Scottish Academy of Music and Drama (RSAMD) in Glasgow, received July 2006. She was a contributing editor to the literary magazine Zembla.

Swinton worked with the Traverse Theatre in Edinburgh, and the Royal Shakespeare Company before embarking on a career in film in the mid-1980s. Her early film work included several film roles for director Derek Jarman, notably War Requiem (1989) playing a nurse opposite Sir Laurence Olivier as an old soldier. In 1991, Swinton won the Volpi Cup Best Actress award for her role in the postmodern film Edward II. Swinton also played the title role in Orlando, Sally Potter's film version of the novel by Virginia Woolf.

Swinton gained great artistic acclaim for a period in 1995 when she developed a performance/installation art piece in which as a live exhibit in the Serpentine Gallery, London, she was on display to the public for a week, asleep or apparently so, in a glass case, as a piece of performance art. The piece is often erroneously credited to Cornelia Parker, whom Swinton invited to collaborate for the installation in London. The following year, the performance, entitled The Maybe, was repeated at the Museo Barracco in Rome. She also appeared in the music video for Orbital's "The Box".

Recent years have seen Swinton move towards more mainstream projects, including the leading role in the well-reviewed American film The Deep End (2001), for which she was nominated for a Golden Globe Award. She appeared as a supporting character in films such as The Beach (2000), featuring Leonardo DiCaprio, and Vanilla Sky (2001) with Tom Cruise and, as the scheming archangel Gabriel in Constantine (2005) with Keanu Reeves. Swinton has also appeared in the British films The Statement (2003) and Young Adam (2003), and sat on the jury of the 2004 Cannes Film Festival.

In 2005, Swinton's performance as the sinister, seductive villainess, the White Witch Jadis, in the film version of The Chronicles of Narnia: The Lion, the Witch and the Wardrobe garnered critical praise as did her portrayal of Audrey Cobb in the Mike Mills film adaptation of the novel Thumbsucker.

Swinton's performance as Karen Crowder in Michael Clayton also drew favorable reviews, for which she earned her second Golden Globe nomination for Best Supporting Actress. After winning a BAFTA award in the same category at the 61st British Academy Film Awards, Swinton won an Oscar for Best Performance by an Actress in a Supporting Role at the 80th Academy Awards, the film's sole win.