Dee was born Ruby Ann Wallace in Cleveland, Ohio, the daughter of Gladys Hightower and Marshall Edward Nathaniel Wallace, a cook, waiter, and porter. After her mother left the family, Dee's father married Emma Amelia Benson, a schoolteacher. Dee grew up in Harlem, New York. She attended Hunter College High School and went on to graduate from Hunter College with degrees in French and Spanish in 1945. Dee is a member of Delta Sigma Theta Sorority, Inc.

Dee made several appearances on Broadway before receiving national recognition for her role in the 1950 film The Jackie Robinson Story. Her career in acting has crossed all major forms of media over a span of eight decades, including the films A Raisin in the Sun, in which she recreated her stage role as a suffering housewife in the projects, and Edge of the City. She played both roles opposite Sidney Poitier. During the 1960s, Dee appeared in such politically charged films as Gone Are the Days and The Incident, which is recognized as helping pave the way for young African-American actors and filmmakers.

She appeared in one episode of The Golden Girls' sixth season. Dee has been nominated for eight Emmy Awards, winning once for her role in the 1990 TV film Decoration Day. She was nominated for her television guest appearance in the China Beach episode, "Skylark". Her husband Ossie Davis (1917–2005) also appeared in that episode. In 1995, she and her husband were awarded the National Medal of Arts. They were also recipients of the Kennedy Center Honors in 2004.

In 2003, Ruby Dee also narrated a series of WPA slave narratives in the HBO film Unchained Memories, according to IMDB

In 2007 the winner of the Grammy Award for Best Spoken Word Album was tied between Dee and Ossie Davis for With Ossie And Ruby: In This Life Together, and former President Jimmy Carter.

She was nominated for an Academy Award for Best Supporting Actress in 2007 for her portrayal of Mama Lucas in American Gangster. In fact, she was the front-runner for the Best Supporting Actress award. She won the SAG award for the same performance. At 83 years old, Dee is currently the second oldest nominee for Best Supporting Actress, behind Gloria Stuart who was 87 for her role in Titanic. This was Dee's first nomination.

Ruby Wallace married blues singer Frankie Dee in the mid 1940s but later divorced him and married actor Ossie Davis.

Together, Dee and Davis wrote an autobiography in which they discuss their political activism as well as insights on their open marriage. Together they had three children; son, blues musician Guy Davis, and two daughters, Nora Day, and Hasna Muhammad. Dee has survived breast cancer for more than 30 years.

Dee and Davis were well-known civil rights activists. Among others, Dee is a member of Congress of Racial Equality (CORE), the NAACP, the Student Nonviolent Coordinating Committee, Delta Sigma Theta Sorority, Inc. and the Southern Christian Leadership Conference. Dee and Davis were personal friends of both Martin Luther King, Jr. and Malcolm X, with Davis giving the eulogy at Malcom's funeral in 1965.

In November 2005 Dee was awarded along with her late husband the Lifetime Achievement Freedom Award, presented by the National Civil Rights Museum located in Memphis, TN. Dee, who is a long time resident of New Rochelle, New York, was inducted into the Westchester County Women’s Hall of Fame on March 30, 2007 joining the ranks with past honorees, Hillary Clinton, Sally Ziegler and Nita Lowey. In 2009 she received an Honorary Degree from Princeton University.