She was born in Los Angeles, California, the daughter of director Ray Grey. One of her early babysitters was movie star Gloria Swanson. Grey debuted at the age of ten in the silent film Uncle Tom's Cabin (1927) as Little Eva. She continued acting for a few more years, but then left movies in order to finish her education.
Grey returned to films in the 1930s with bit parts and extra work, but she eventually signed a contract with Metro-Goldwyn-Mayer and appeared in such MGM movies as Another Thin Man (1939), Hullabaloo (1940), The Big Store (1941), and The Hardys Ride High (1939) with Mickey Rooney.
She left MGM in 1942, and signed with several different studios over the years, working steadily. During the 1950s and 1960s, producer Ross Hunter frequently included Grey in his popular soap melodramas, such as All That Heaven Allows, Back Street and Madame X.
She had an on again/off again relationship with Clark Gable in the 1940s. After his wife Carole Lombard died and he returned from military service, Clark and Virginia were often seen at restaurants and nightclubs together. Many, including Virginia herself, expected him to marry her. The tabloids were all expecting the wedding announcement. It was a great surprise when he hastily married Lady Sylvia Ashley in 1949. Virginia was heartbroken. They divorced in 1952, but much to Virginia's dismay their brief romance was never rekindled. Her friends say that her hoping and waiting for Clark was the reason she never married.
She was a regular on television in the 1950s and 1960s, appearing on Playhouse 90, General Electric Theater, The DuPont Show with June Allyson, Your Show of Shows, Wagon Train, Bonanza, Marcus Welby, M.D., Love, American Style, Burke's Law, The Virginian, Peter Gunn and many others.
She was portrayed by Anna Torv in the HBO Mini-series The Pacific.