Kelly was born Sarah Veronica Rose Kelly in Brooklyn to Irish immigrants parents John (died 1942) and Delia Kelly (1875-1930). She began her career in vaudeville as a dancer at the age of 12. While in vaudeville, she performed in Frank Fay’s act, first in a song-and-dance routine and later as Fay’s comic foil. In one routine, Kelly told Fay and the audience that she had been at the beauty parlor. Fay remarked, “And they didn’t wait on you?” She remained with Fay for several seasons until Fay eventually dismissed her. Kelly made her Broadway debut in 1928. In 1930 and 1931, she performed for producer Earl Carroll in his popular Sketches and Vanities musicals. Kelly, like other New York actors, made her screen debut in a Vitaphone short subject filmed there. In 1933 producer Hal Roach hired Kelly to co-star with Thelma Todd in a series of short-subject comedies. (Kelly replaced ZaSu Pitts, who left Roach after a salary dispute). The Todd-Kelly shorts cemented Patsy Kelly’s image: a brash, wisecracking woman who frequently punctured the pomposity of other characters. Later entries in the series showcased Kelly’s dancing skills. Kelly made 35 shorts with Todd before Todd died in 1935. Lyda Roberti replaced Todd, but died of heart failure in 1938. After the popularity of shorts began to wane, Kelly moved to full length feature films, often playing working-class character roles in comedies and musicals. One of her memorable roles was as Etta, the cook, in the five Academy Awards-nominated 1938 comedy movie Merrily We Live. By 1943, Kelly’s film career had begun to decline. She appeared in films for Producers Releasing Corporation, the smallest and cheapest of the movie studios. Her last starring roles were in two PRC comedies, My Son, the Hero and Danger! Women at Work, both released in 1943. Kelly left Hollywood and would not make another film for 17 years.

After leaving Hollywood, Kelly returned to New York City where she worked in radio and did summer stock. She also worked as a personal assistant to Tallulah Bankhead (whom she later claimed she had a sexual relationship with). Kelly returned to the screen in the 1950s with television and sporadic film roles. On television she appeared in guest roles on 26 Men, Kraft Television Theatre, The Man from U.N.C.L.E, The Dick Van Dyke Show, The Wild Wild West, and Alfred Hitchcock Presents, as well as many unsold pilots. She also made a memorable appearance as Laura-Louise in the film thriller Rosemary’s Baby (1968), directed by Roman Polanski, alongside veteran actors Sidney Blackmer, Ruth Gordon, and Maurice Evans. She returned to Broadway in 1971 in the revival of No, No, Nanette with fellow hoofers Ruby Keeler and Helen Gallagher. Kelly scored a huge success as the wisecracking, tap-dancing maid, and won Broadway’s 1971 Tony Award for Best Featured Actress in a Musical for her performance in the show. She matched that success the following year when she starred in Irene with Debbie Reynolds, and was again nominated for a Tony. In 1976, she appeared as the housekeeper Mrs. Schmauss in the film Freaky Friday starring Jodie Foster and Barbara Harris. Her final movie appearance came in the 1979 Disney comedy The North Avenue Irregulars, also co-starring Harris, along with Cloris Leachman, Edward Herrmann and Karen Valentine. Kelly’s last onscreen appearance was a guest spot in a two-part episode of The Love Boat in 1979.

At a time when being openly gay was not socially acceptable, Kelly was open about her sexuality. On occasion she would frankly disclose, in public and with typical candor, to being a “dyke”. During the 1930s, she disclosed to Motion Picture magazine that she had been living with actress Wilma Cox for several years and had no intention of getting married. She later claimed she had an affair with Tallulah Bankhead when she worked as Bankhead’s personal assistant. In January 1980, Kelly suffered a stroke while in San Francisco which caused her to lose the ability to speak. She was admitted to Englewood Nursing Home in Englewood, New Jersey, on the advice of her old friend Ruby Keeler where she underwent therapy. On September 24, 1981, Kelly died of cancer at the Motion Picture & Television Country House and Hospital in Woodland Hills, California. She is buried with her parents, John and Delia Kelly, in Calvary Cemetery in Queens. For her contribution to the motion picture industry, she has a star on the Hollywood Walk of Fame at 6669 Hollywood Boulevard.