Keener was born in Miami, Florida in 1959 (though some sources say 1960), the third of five children of Evelyn (née Jamiel) and Jim Keener, a manager of an automotive store. She is of Irish descent on her father's side and of Lebanese descent on her mother's. Keener was raised Roman Catholic and attended Catholic schools. She attended Monsignor Edward Pace High School.
Keener's sister, Elizabeth Keener, is also an actress.
Keener attended Wheaton College, in Norton, Massachusetts. Keener majored in English and history, enrolling in a theater course. Her first theatrical production was the Wendy Wasserstein play Uncommon Women and Others, during her junior year at Wheaton. She graduated with her B.A. from Wheaton College in 1983.
Keener had a supporting role as Lt. Cricket Sideris in the television series Ohara about an Asian-American detective. The series ran from January 1987 to May 1988.
Her first film appearance was one line in About Last Night... (1986). Although she struggled professionally over the next few years, one low-quality project had an unexpected dividend: Keener met her future husband, actor Dermot Mulroney in 1987 while working on Survival Quest (1989), after Mulroney became stuck while attempting to scale a cliff.
She also guest-starred as an artist on an episode of Seinfeld called "The Letter". She played Jerry's girlfriend, an artist who painted a famous portrait of Kramer. Keener then earned her first starring role in Johnny Suede with the then unknown Brad Pitt. Her performance gained critical acclaim and earned her her first Independent Spirit Award nomination for Best Female Lead. She went on to work with director Tom Dicillo, again, in Living in Oblivion (1995). Two years later, she was once again nominated for an Independent Spirit Award for her performance in Walking and Talking, an independent cult-comedy film directed by Nicole Holofcener.
In 2000, Keener earned her first Oscar nomination for Best Supporting Actress for her role in Being John Malkovich, directed by Spike Jonze. In 2001, she worked with director Nicole Holofcener in Lovely and Amazing garnering her a third Independent Spirit Award nomination. In 2002, she co-starred with Edward Norton in the off-Broadway revival of Burn This and the film Death to Smoochy. She also took part in the film Full Frontal, and Simone alongside Al Pacino.
In 2005, she starred in the political thriller The Interpreter, The Ballad of Jack and Rose, with Daniel Day-Lewis and played the love interest of Steve Carell in Judd Apatow's The 40-Year-Old Virgin. Keener's performance as writer Harper Lee in Capote (also 2005) earned her several awards and nominations, including her second Oscar nomination for Best Supporting Actress. In 2006, she starred in the film Friends with Money, directed by Nicole Holofcener.
In 2007, Keener played Jan Burres in Sean Penn's critically acclaimed film Into the Wild, based on Jon Krakauer's best-selling book of the same name. In 2008, her film An American Crime, the true story of Gertrude Baniszewski, a middle-aged mother who tortured and killed Sylvia Likens in her Indiana home, was aired on Showtime. Keener plays Baniszewski and her portrayal earned her an Emmy nomination in the Best Actress in a TV Mini-Series or Movie category. In 2008, Keener portrayed Philip Seymour Hoffman's wife Adele in Charlie Kaufman's directorial debut, Synecdoche, New York. She collaborated with Hoffman as husband and wife again in the 2012 film A Late Quartet. Keener played the title character's mother in the 2010 film Percy Jackson & the Olympians: The Lightning Thief, based on the series of books by Rick Riordan.
Keener starred in the six-episode HBO miniseries Show Me a Hero, based on the 1999 nonfiction book of the same name by Lisa Belkin. It aired in August 2015.
In 2016, Keener starred in the independent film Unless.
In November 2016, the first episode of the podcast series Homecoming was released. It is a psychological thriller from Gimlet Media, starring Keener, Oscar Isaac, and David Schwimmer. Homecoming is a six-episode thriller that centers around a mystery involving a caseworker (voiced by Keener), her supervisor (voiced by David Schwimmer), and a soldier trying to rejoin civilian life (voiced by Oscar Isaac). It has a script from Eli Horowitz (The Silent History) and Micah Bloomberg (Creative Control) and sound design from Serial's Mark Phillips.
Keener married actor Dermot Mulroney in 1990. They have a son, Clyde, born in 1999. Mulroney filed for divorce in June, 2007, citing irreconcilable differences and the divorce became final on December 19, 2007.