Todd was born in Lawrence, Massachusetts to John and Alice Todd, and was a bright student who achieved good academic results. She intended to become a school teacher. However, in her late teens, she began entering beauty pageants, winning the title of Miss Massachusetts in 1925. While representing her home state, she was spotted by a Hollywood talent scout and began her career in film.  During the silent film era, Todd appeared in numerous supporting roles that made full use of her beauty but gave her little chance to act. With the advent of the talkies, Todd was given opportunity to expand her roles when producer Hal Roach signed her to appear with such comedy stars as Harry Langdon, Charley Chase, and Laurel and Hardy. In 1931 she was given her own series, teaming with ZaSu Pitts (pronounced “Say-zoo,” also her character’s name) for slapstick comedies. This was Roach’s attempt to create a female version of Laurel and Hardy. When Pitts left Roach in 1933, she was replaced by Patsy Kelly. The Todd shorts often cast her as a working girl having all sorts of problems, and trying her best to remain poised and charming despite the embarrassing antics of her sidekick.

In 1931, Todd became romantically involved with director Roland West, and starred in his film Corsair.  Thelma Todd became highly regarded as a capable film comedian, and Roach loaned her out to other studios to play opposite Wheeler & Woolsey, Buster Keaton, Joe E. Brown, and the Marx Brothers. She also appeared successfully in such dramas as the original 1931 film version of The Maltese Falcon starring Ricardo Cortez as Sam Spade, in which she played Miles Archer’s treacherous widow. During her career she appeared in 119 films although many of these were short films, and was sometimes publicized as “The Ice Cream Blonde.”  In August 1934, she opened a successful cafe at Pacific Palisades, called Thelma Todd’s Sidewalk Cafe, attracting a diverse clientele of Hollywood celebrities as well as many tourists.  Todd continued her short-subject series through 1935, and was featured in the full-length Laurel and Hardy comedy The Bohemian Girl. This was her last film; she died after completing all of her scenes, but most of them were re-shot. Producer Roach deleted all of Todd’s dialogue and limited her appearance to one musical number.

On the morning of December 16, 1935, Thelma Todd was found dead in her car inside the garage of Jewel Carmen, a former actress and former wife of Todd’s lover and business partner, Roland West. Carmen’s house was approximately a block from the topmost side of Todd’s restaurant. Her death was determined to have been caused by carbon monoxide poisoning. Todd had a wide circle of friends and associates as well as a busy social life. Police investigations revealed that she had spent the previous Saturday night (December 14) at the Trocadero, a popular Hollywood restaurant, at a party hosted by entertainer Stanley Lupino and his actress daughter, Ida. At the restaurant, she had had a brief but unpleasant exchange with her ex-husband, Pat DiCicco. However, her friends stated that she was in good spirits, and were aware of nothing unusual in her life that could suggest a reason for her committing suicide. She was driven home from the party in the early hours of December 15 by her chauffeur.  The detectives of the LAPD concluded that Todd’s death was accidental, the result of her either warming up the car to drive it or using the heater to keep herself warm. However, other evidence, such as a bloodied lip, seemed to point to foul play.

A Coroner’s Inquest into Todd’s death was held on December 18, 1935. Autopsy surgeon A.P. Wagner testified that there were “no marks of violence anywhere upon or within the body” with only a “superficial contusion on the lower lip.” The jury ruled that the death appeared to be accidental but recommended “further investigation to be made into the case, by proper authorities.”   Subsequently a grand jury probe was held to determine whether Todd’s death was a murder. After four weeks of testimony, the inquiry was closed with no evidence of murder being brought forward. The case was closed by the Homicide Bureau, which listed the death as “accidental with possible suicide tendencies.” However, investigators were unable to find any motive for suicide or a suicide note.  In her book Hot Toddy: The True Story of Hollywood’s Most Sensational Murder, author Andy Edmonds argues that known gangster Charles “Lucky” Luciano was behind Todd’s death.  Todd’s body was cremated. After her mother’s death in 1969, Todd’s remains were placed in her mother’s casket and buried in Bellevue Cemetery in her hometown of Lawrence, Massachusetts.