Williams was born in Seattle, Washington, and made her screen debut in Western Chivalry in 1910. The success of The Italian (1915), in which she played the wife of an immigrant, resulted in her being typecast in roles as Latin characters. In 1917, the Los Angeles Times noted, "Heretofore she has been known almost exclusively as a portrayer of Latin parts, simply because she was such success in that sort of a role in The Italian, in which she played the leading part opposite George Beban."
In 1917, Williams and several other of the important actors and directors from Inceville left the studio to join the newly formed Paralta Company. The Los Angeles Times wrote, "Now that she is at the head of her own company and has the right to choose her own stories, she will have all the freedom in the world to show her versatility." Williams first film with Paralta, and also the last film in her acting career, was a story of the Klondike Gold Rush, Carmen of the Klondike.
During her years with the Triangle studios, Williams had become known for her many gowns, and the phrase "forty famous frocks" was coined to describe her wardrobe. When Williams left Triangle for Paralta, the Los Angeles Times asked whether the famous frocks would move with her. It reported, "Clara is now in a quandary. She wants to get some more frocks, but if she does it will spoil the phrase 'forty famous frocks,' and that would never do."
While working at the Ince studios, Williams met director Reginald Barker. He directed her in numerous films, including The Man from Oregon (1915), The Criminal (1916), Three of Many (1917), Paws of the Bear (1917), The One Woman (1918), and Carmen of the Klondike (1918), which was her last screen appearance. She married Barker in February 1920 and retired.
In 1925, the Los Angeles Times interviewed the former movie star who the Times reported was "now just a housewife." At the time, Williams said that she and her husband had never had a quarrel and defended her new domestic life by stating, "To me there is no comparison in the amount of pleasure to be enjoyed from home life as opposed to a career."
In late February 1928, the Los Angeles Times reported that Williams had undergone a major surgery for an undisclosed condition at the California Lutheran Hospital. In May 1928, she died at her Los Angeles home at age 40 following a prolonged illness. She was survived by her husband and a brother. Her funeral was held at the Little Church of the Flowers, and her remains were cremated at Forest Lawn Memorial Park.