Malone was born Dorothy Eloise Maloney in Chicago, Illinois. The family moved to Dallas, Texas, where she worked as a child model and began acting in school plays at Ursuline Convent and Highland Park High School. While performing at Southern Methodist University, she was spotted by a talent agent for RKO and was signed to a studio contract, making her film debut in 1943 in The Falcon and the Co-Eds.
Much of Malone's early career was spent in supporting roles in B-movies, many of them Westerns, although on occasion she had the opportunity to play small but memorable roles, such as that of a brainy, lusty, bespectacled bookstore clerk in The Big Sleep (1946) with Humphrey Bogart, and the love interest of Dean Martin in the musical-comedy Artists and Models (1955). Malone has been married and divorced three times and has two daughters, Mimi and Diane, from her first marriage to actor Jacques Bergerac. Her star in the Hollywood Walk of Fame is located at 1718 Vine. As of 2009, Malone is retired and living in Dallas, Texas.