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Born Clara Lou Sheridan in Denton, Texas, she was a college student when her sister sent a photograph of her to Paramount Pictures. She subsequently entered and won a beauty contest, with part of her prize being a bit part in a Paramount film. She abandoned college to pursue a career in Hollywood.

She made her film debut in 1934, aged 19, in the film Search For Beauty, and played uncredited bit parts in Paramount films for the next two years. Paramount made little effort to develop Sheridan's talent, so she left, signing a contract with Warner Bros. in 1936, and changing her name to "Ann Sheridan".

Sheridan's career prospects began to improve. The red-haired beauty would soon become Warner's top sex symbol. Tagged "The Oomph Girl", Sheridan was a popular pin-up girl by the early 1940s, despite the fact the she was generally assigned films that did not show off her talents.

She received substantial roles and positive reaction from critics and moviegoers in such films as Angels with Dirty Faces (1938), opposite James Cagney and Humphrey Bogart, Dodge City (1939) with Errol Flynn and Olivia de Havilland, Torrid Zone with Cagney and They Drive by Night with George Raft and Bogart (both 1940), The Man Who Came to Dinner (1942) with Bette Davis, and Kings Row (1942), where she received top billing playing opposite Ronald Reagan, Robert Cummings, and Betty Field. Known for having a fine singing voice, Ann also appeared in such musicals as Thank Your Lucky Stars (1943) and Shine On, Harvest Moon (1944). She was also memorable in two of her biggest hits, Nora Prentiss and The Unfaithful, both in 1947.

Despite these successes, her career began to decline. Her role in I Was a Male War Bride (1949), directed by Howard Hawks and costarring Cary Grant, gave her another success (she was especially good in this brilliant comedy), but by the 1950s, she was struggling to find work and her film roles were sporadic.

Sheridan appeared in the television soap opera Another World during the mid-1960s, then started a role in the TV series Pistols 'n' Petticoats.

She became ill during the filming of its first season, and died from esophageal and liver cancer in Los Angeles, California. She had been a chain cigarette smoker for years; Cagney remarked in his autobiography that when the cancer struck, "she didn't have a chance." She was cremated and her ashes were stored at the Chapel of the Pines Crematory in Los Angeles until they were permanently interred at Hollywood Forever Cemetery in 2005.

Sheridan married four times, including a marriage lasting one year to fellow Warners actor, George Brent, but had no children.

For her contributions to the motion picture industry, Ann Sheridan has a star on the Hollywood Walk Of Fame at 7024 Hollywood Boulevard