Levy was born to Jewish parents Mark, a general practitioner, and Lisa Levy, an administrator at her husband's practice. She has two elder brothers, Robi and Josh, who are film directors/writers/producers known as The Levy Brothers. Levy graduated from Westdale Secondary School in 1999. Set to study Shakespeare in Canada, Levy was given the suggestion to audition for New York's American Musical and Dramatic Academy (AMDA); on a whim she did and got in. She has also taught several audition workshops for students in the NYC area. She went to camp in Camp Ramah in Canada.
A week after graduating from AMDA she made a name for herself by playing the role of Maureen Johnson in the U.S. national tour of Rent. Levy then played the role of Penny Pingleton in both the Broadway and U.S. national tour companies of Hairspray after understudying the role in the Toronto company. During this time, she also covered the role of Amber Von Tussle.
In 2008, Levy starred as Elphaba in the Los Angeles sit-down production of Wicked. She had previously understudied the role on Broadway and briefly served as standby in Los Angeles. Her first performance took place on January 1, 2008, replacing Eden Espinosa. She left the show on May 11 of the same year, and was replaced by her standby Teal Wicks.
Levy recently starred as Sheila in the Broadway revival of Hair, which began previews on March 6, 2009 and opened March 31, 2009 at the Al Hirschfeld Theatre. She left the Broadway cast on March 7, 2010, when she was succeeded by Diana DeGarmo, to open the West End revival which began performances April 1, 2010 at the Gielgud Theatre. The show later closed September 4, 2010.
In 2011 Levy originated the role of Molly Jensen in Ghost the Musical, which opened at Manchester Opera House in March for a seven-week run before transferring to London's West End at The Piccadilly Theatre from June 24, 2011. The official gala opening night took place on July 19. Levy departed the West End production on January 12, 2012, where she was succeeded by Siobhan Dillon the next day. She later opened the Broadway production reprising her role as Molly Jensen along with Richard Fleeshman, her co-star in the West End production as Sam Wheat. The Broadway production began previews on March 15, 2012 at the Lunt-Fontanne Theatre and officially opened on April 23, 2012. Levy and Fleeshman remained in the production until its premature closure on August 18, 2012.
She can be heard on the cast recording for Hair and Ghost the Musical as well as singing, "Please Don't Let Me Go" on the re-release of composer Scott Alan's album Keys. Levy can also be heard singing "Dear Daddy" on composer Bobby Cronin's album and "I Am Yours" on composer Jonathan Reid Gealt's album Thirteen Stories Down. All of them are available on iTunes.
On November 26, it was announced that Levy would be releasing an EP in January 2013 and will be promoting the release through a concert alongside her husband, David, at Galapagos Art Centre, New York on the January 14th, followed by two dates at the London Hippodrome Casino on 26 and 27 January.
Levy starred as Sara in the acclaimed Manhattan Theatre production of Murder Ballad, a musical by Trip Cullman. The show began previews on May 9, 2013 and officially opened at the off-Broadway Union Square Theatre on May 22. The show concluded its run on July 21, 2013.
On October 22, 2013 it was announced Levy had been cast as Fantine in the Broadway revival of Les Miserables, which opened at the Imperial Theatre on March 23, 2014. She left the role on 1 March 2015. On April 17, 2017, Disney Theatrical Productions officially announced that Levy would originate the role of Elsa in the musical adaptation of Frozen.
On October 30, 2011, Levy married actor David Reiser in an evening ceremony at the Soho Beach House in Miami, after five years of dating. In March 2016, Levy gave birth to the couple's first child, a son.