Dunne was born in Louisville, Kentucky, to Joseph John Dunn (1863–1913), a steamboat inspector for the United States government, and Adelaide Henry (1871–1936), a concert pianist/music teacher from Newport, Kentucky. Irene Dunne would later write, "No triumph of either my stage or screen career has ever rivalled the excitement of trips down the Mississippi on the riverboats with my father." She was fourteen when her father died on April 6, 1913. She saved all of his letters and often remembered and lived by what he told her the night before he died: "Happiness is never an accident. It is the prize we get when we choose wisely from life's great stores."
Following her father's death, Irene, her mother, and her younger brother Charles moved to her mother's hometown of Madison, Indiana. Dunne's mother taught her to play the piano as a very small girl. According to Dunne, "Music was as natural as breathing in our house." Dunne was raised as a devout Roman Catholic. Nicknamed "Dunnie", she took piano and voice lessons, sang in local churches and high school plays before her graduation in 1916.
Dunne earned a diploma to teach art, but took a chance on a contest and won a prestigious scholarship to the Chicago Musical College, where she graduated in 1926. With a soprano voice, she had hopes of becoming an opera singer, but did not pass the audition with the Metropolitan Opera Company.
Irene, after adding an "e" to her surname, turned to musical theater. She toured several provincial cities in 1921–22 playing the lead role in the popular play "Irene", before making her Broadway debut in 1922 in Zelda Sears's The Clinging Vine. The following year, Dunne played a season of light opera in Atlanta, Georgia, though in her own words Dunne created "no great furor". On July 16, 1927, Dunne married Francis Griffin, a New York dentist, whom she had met in 1924 at a supper dance in New York. Despite differing opinions and battles that raged furiously, Dunne eventually agreed to marry him. Dunne later moved to Hollywood with her mother and brother and maintained a long-distance marriage with her husband in New York until he joined her in California in 1936.
By 1929, she had a successful Broadway career playing leading roles. Dunne's role as Magnolia Hawks in Jerome Kern and Oscar Hammerstein II's Show Boat was the result of a chance meeting with showman Florenz Ziegfeld in an elevator the day she returned from her honeymoon. She was discovered by Hollywood while starring with the road company of Show Boat in 1929. She signed a contract with RKO and appeared in her first movie, Leathernecking (1930), a film version of the musical Present Arms. Already in her thirties when she made her first film, she would be in competition with younger actresses for roles, and found it advantageous to evade questions that would reveal her age. Her publicists encouraged the belief that she was born in 1901 or 1904, and the former is the date engraved on her tombstone.
During the 1930s and 1940s, Dunne blossomed into a popular screen heroine in movies such as the original Back Street (1932) and the original Magnificent Obsession (1935) and re-created her role as Magnolia in Show Boat (1936), directed by James Whale. Love Affair (1939) is the first of three films she made opposite Charles Boyer. She starred, and sang "Smoke Gets in Your Eyes", in the Fred Astaire-Ginger Rogers film version of the musical Roberta (1935).
Dunne was apprehensive about attempting her first comedy role, as the title character in Theodora Goes Wild (1936), but discovered that she enjoyed it. She turned out to possess an aptitude for comedy, with a flair for combining the elegant and the madcap, a quality she displayed in such films as The Awful Truth (1937) and My Favorite Wife (1940), both co-starring Cary Grant. Other roles include Julie Gardiner Adams in Penny Serenade (1941), again with Grant, Anna and the King of Siam (1946) as Anna Leonowens, Lavinia Day in Life with Father (1947), and Marta Hanson in I Remember Mama (1948). In The Mudlark (1950), she was nearly unrecognizable under heavy makeup as Queen Victoria.
The comedy It Grows on Trees (1952) became Dunne's last screen performance, although she remained on the lookout for suitable film scripts for years afterwards. The following year, she was the opening act on the 1953 March of Dimes showcase in New York City. While in town, she made an appearance as the mystery guest on What's My Line? She also made television performances on Ford Theatre, General Electric Theater, and the Schlitz Playhouse of Stars, continuing to act until 1962.
In 1952–53, Dunne played newspaper editor Susan Armstrong in the radio program Bright Star. The syndicated 30-minute comedy-drama also starred Fred MacMurray.
Dunne commented in an interview that she had lacked the "terrifying ambition" of some other actresses and said, "I drifted into acting and drifted out. Acting is not everything. Living is."
Dunne was present at Disneyland on "Dedication Day" in 1955 and was asked by Walt Disney to christen the Mark Twain River Boat, which she did with a bottle filled with water from several major rivers across the United States.
In 1957, President Eisenhower appointed Dunne one of five alternative U.S. delegates to the United Nations in recognition of her interest in international affairs and Roman Catholic and Republican causes. In her retirement, she devoted herself primarily to civic, philanthropic, and Republican political causes. In 1965, she became a board member of Technicolor, the first woman ever elected to the board of directors.
Dunne remained married to Dr. Francis Griffin until his death on October 14, 1965. They lived in Holmby Hills, California in a Southern plantation-style mansion they designed. They had one daughter, Mary Frances (née Anna Mary Bush), who was adopted in 1936 (finalized in 1938) from the New York Foundling Hospital, run by the Sisters of Charity of New York. Both she and her husband were members of the Knights of Malta.
Dunne was a devout Catholic who became a daily communicant. She was a member of the Church of the Good Shepherd and the Catholic Motion Picture Guild in Beverly Hills, California. She was good friends with actress Loretta Young and remained close to others like Jimmy Stewart.
One of Dunne's last public appearances was in April 1985, when she attended the dedication of a bust in her honor at St. John's (Roman Catholic) Hospital in Santa Monica, California, for which her foundation, The Irene Dunne Guild, had raised more than $20 million. The Irene Dunne Guild remains "instrumental in raising funds to support programs and services at St. John's" hospital in Santa Monica.
Dunne died at her Holmby Hills home in Los Angeles on September 4, 1990, and is entombed in the Calvary Cemetery, East Los Angeles. Her personal papers are housed at the University of Southern California. She was survived by her daughter, two grandchildren and two great-grandchildren.
A bronze bust of Dunne is on display at St. John's Hospital. The artwork, commissioned by the hospital from artist Artis Lane, has a plaque reading "IRENE DUNNE/First Lady Of/Saint John's Hospital/and/Health Center Foundation."
Dunne has been described as the Best Actress never to win an Academy Award. She received five Best Actress nominations during her career: for Cimarron (1931), Theodora Goes Wild (1936), The Awful Truth (1937), Love Affair (1939) and I Remember Mama (1948).
She was named to the International Best Dressed List Hall of Fame in 1958. Other honors include the Laetare Medal from Notre Dame University in 1949, the Bellarmine Medal from Bellarmine College in 1965 and Colorado's Women of Achievement in 1968. She has a star on the Hollywood Walk of Fame at 6440 Hollywood Blvd. and displays in the Warner Bros. Museum and Center for Motion Picture Study.Schlitz Playhouse of Stars (1951) HostGeneral Electric Theater (1953) episode: "Go Fight City Hall" 10/15/1962Saints and Sinners (1962) episode: "Source of Information" 10/15/1962Insight (1960) episode: "Beelzebub & the Bolsheviks" 1/15/1962Frontier Circus (1961) episode: "Dr. Sam" 10/26/1961The DuPont Show with June Allyson (1959) playing "Dr. Gina Kerstas", episode: "The Opening Door" 10/5/1959What's My Line? (10/20/1957) (Episode # 385) (Season 9, Ep 8) Mystery Guest.Ford Theatre (1952) episode: "Sheila" 5/24/1956Letter to Loretta (1953) Host, episode: "Tropical Secretary" 5/24/1956Ford Theatre (1952) episode: "On the Beach" 5/24/1956Letter to Loretta (1953) Host, episode: "Slander" 10/30/1955Ford Theatre (1952) episode: "Touch of Spring" 2/3/1955Ford Theatre (1952) episode: "Sister Veronica" 4/15/1954
According to Francis Ford Coppola's audio commentary on Bram Stoker's Dracula, Columbia used Dunne's image on the familiar logo. In Mad Men the character of Peggy Olson is compared to Irene.