Ghostley was born in Eve, Vernon County, Missouri in 1923, to Edna Muriel (née Rooney) and Harry Francis Ghostley, who worked as a telegraph operator. She grew up in Henryetta, Oklahoma. After graduating from high school, she attended the University of Oklahoma but dropped out to pursue a career in theatre. Ghostley first came to Broadway in Leonard Sillman’s New Faces of 1952 and in the film version released in 1954. She appeared in the 1960 revue A Thurber Carnival and in The Beauty Part (1962), playing several distinct roles in each. She also performed in several musical comedies, including Shangri-La (1956). In 1978 she succeeded Dorothy Loudon, who had created the role of Miss Hannigan in the original Broadway run of the musical Annie. A veteran of early television, Ghostley appeared as Joy, one of the ugly stepsisters in the 1957 musical television production of Richard Rodgers and Oscar Hammerstein’s Cinderella, which starred Julie Andrews in the title role. The other stepsister was played by actress Kaye Ballard. Twelve years later, Ghostley guest starred as a harried maternity nurse on Miss Ballard’s comedy series, The Mothers-in-Law. Ghostley guest starred on the NBC police comedy, Car 54, Where Are You?, with Joe E. Ross and Fred Gwynne. She portrayed recurring characters on several situation comedies, beginning with Bewitched in 1966 in “Maid To Order”, in which Ghostley played an inept maid named Naomi, who was hired by Darrin Stephens (played by Dick York) to assist his wife Samantha (Elizabeth Montgomery) during her pregnancy. Towards the end of the 1965-66 season, actress-comedienne Alice Pearce, who was featured as nosy neighbor Gladys Kravitz on Bewitched, died. The producers of the series immediately offered the role of Gladys to Ghostley, who refused it. As a result, in the fall of 1966, character actress Sandra Gould assumed the role of Gladys. In September 1969, after the death of actress Marion Lorne, who played Aunt Clara, Ghostley joined Bewitched as a semi-regular in the role of Esmeralda, a shy witch who served as a maid and babysitter to the Stephens’ household. Ghostley’s character of Esmeralda was created to replace Aunt Clara’s role as a bumbler of magic. (Coincidentally, Ghostley and Lorne shared a brief scene together in the 1967 film The Graduate, a few months prior to Lorne’s death and before Ghostley was cast in Bewitched.)

Ghostley’s Esmeralda appeared in 15 episodes between 1969 and 1972. During her two years on Bewitched as a semi-regular, Ghostley also joined the cast of Mayberry R.F.D., playing Cousin Alice after Frances Bavier’s character, Aunt Bee, was written out of the series. She appeared in 14 episodes. In the spring of 1972, Bewitched was canceled by ABC after eight years. In September 1972, she was hired as a semi-regular for the ABC-TV variety series, The Julie Andrews Hour. In addition to participating in songs and sketches, Andrews and Ghostley were featured in a recurring segment as roommates sharing a small apartment. The Julie Andrews Hour was canceled by ABC in the spring of 1973 after twenty-four episodes. Throughout the 1970s and 1980s, Ghostley appeared in episodes of situation comedies such as Hogan’s Heroes (alternating with Kathleen Freeman playing Gertrude Linkmeyer, General Burkhalter’s sister), Good Times, Maude, One Day at a Time, The Odd Couple and What’s Happening!!. Between 1986 and 1993, Ghostley portrayed Bernice Clifton, the slightly off-kilter, eccentric friend of Julia and Suzanne Sugarbaker’s mother, Perky, on Designing Women. She later played Irna Wallingsford in six episodes of Evening Shade. She also had a recurring role of Ida Mae Brindle in the sitcom Small Wonder, which ran from 1985 to 1989. Among many other guest roles, she appeared in a flashback episode as the crazed mother-in-law of Dorothy Zbornak (Bea Arthur) on The Golden Girls. She made a one-time appearance as “Great-Grandma” in Sabrina the Teenage Witch. Ghostley also made a few guest appearances on the daytime drama Passions in 2000, playing the ghost of Matilda Matthews.

Among her roles in motion pictures, Ghostley appeared in To Kill a Mockingbird (1962), playing Stephanie Crawford, the neighborhood gossip. She appeared in the film version of Grease as shop teacher Mrs. Murdock. In 1985, she had a supporting role in the Nancy Allen comedy Not for Publication. Alice played Grandmama in the direct-to-video movie Addams Family Reunion. Ghostley was married to Felice Orlandi, an Italian-American actor, from 1953 until his death in 2003. Alice Ghostley died at her home in Studio City, California, on September 21, 2007 after a long battle with colon cancer and a series of strokes. On August 20, 2009, her ashes were taken to Oak Hill Cemetery in Siloam Springs, Arkansas, to be buried with her sister, Gladys (died June 21, 2009). The sisters are interred next to their parents.