Born Doris Jensen, Gray was a farmer's daughter from Seward County in eastern Nebraska. After graduation from high school, she studied dramatics at Hamline University, from which she received a Bachelor of Arts. She then decided to travel to California. When she reached La Jolla, where obtained employment as a waitress in a restaurant. After several weeks there, she moved to Los Angeles and enrolled in a drama school. She had leading roles in the Los Angeles stage productions Letters to Lucerne and Brief Music, which won her a 20th Century Fox contract in 1944. After initially playing a bit part in State Fair (1945), she became pregnant and briefly stopped working, only to return a year later as the love interest of the character played by John Wayne in Red River (1948), which was shot in 1946 but held for release until 1948, by which time she had already graduated to leading roles in films noir such as Kiss of Death (1947) opposite Victor Mature and Nightmare Alley (1947) opposite Tyrone Power.
Gray appeared in two 1947 films noir: in Kiss of Death as ex-con Victor Mature's wife and Richard Widmark's target, and in Nightmare Alley as "Electra", Tyrone Power's carnival performer wife. In 1948, she appeared as John Wayne's love interest in the opening sequences of Red River, but, overshadowed by the men in Howard Hawks's western, her career suffered and Fox ended her contract in 1950. Gray worked steadily in the 1950s. She played a crooked nurse in The Sleeping City (1950) and appeared in Kansas City Confidential (1952) and the Stanley Kubrick film noir The Killing (1956), in which she played a lonely woman desperate for love. Other films included Father Is a Bachelor (1950), the cult horror film The Leech Woman (1960), The Phantom Planet(1961), and P.J. (1968).
She made only one film in the 1970s, The Late Liz (1971). She also appeared in one in the '80s, the religious film Cry From the Mountain (1986), produced by Billy Graham. She acted in the films Forgotten Lady (1977), and Mother (1978) with Patsy Ruth Miller. Mother had a premiere at the Museum of Modern Art in New York City.
In 1964, along with actors Victor Jory and Susan Seaforth, Gray testified before the United States Congress as part of "Project Prayer," arguing in favor of a constitutional amendment allowing school prayer.
From the 1950s, Gray guest-starred in episodes of television series such as Maverick, Alfred Hitchcock Presents, Mr. Ed, Rawhide, 77 Sunset Strip, Bonanza, The Deputy, Have Gun Will Travel,Perry Mason, The Dakotas, Family Affair, Ironside, and The Name of the Game. On May 23, 1962, she was cast as Miss Wycliffe in the series finale, "A Job for Summer", of the CBS comedy/drama series, Window on Main Street, starring Robert Young as a widowed author in his hometown.
Gray married Rodney Amateau, a screenwriter, on August 10, 1945; they divorced on February 11, 1949; they had one daughter, Susan (born 1946). Her second husband was William Clymer Bidlack, an aviation executive. They were married from July 14, 1953, until his death in 1978. The union produced a son, Bruce Robin Bidlack (born 1954).
In 1979, Gray married Fritz Zeiser; they remained together until his death in March 2012. They were active with the non-profit organization, Prison Fellowship, founded in 1976 by Chuck Colson, a convicted felon in the Watergate scandal. Prison Fellowship assists the church in ministering to prisoners and their families and victims.