Grahame was born Gloria Grahame Hallward in Los Angeles, California. She was raised a Methodist. Her father, Reginald Michael Bloxam Hallward, was an architect and author; her mother, Jeanne McDougall, who used the stage name Jean Grahame, was a British stage actress and acting teacher. The couple had an older daughter, Joy Hallward (1911-2003), an actress who married John Mitchum (the younger brother of actor Robert Mitchum).

In March, 1974, Grahame was diagnosed with breast cancer. She underwent radiation treatment, changed her diet, stopped smoking and drinking alcohol, and also sought homeopathic remedies. In less than a year the cancer went into remission. The cancer returned in 1980 but Grahame refused to acknowledge her diagnosis or seek radiation treatment. Despite her failing health, Grahame continued working in stage productions in the United States and the United Kingdom. In Autumn of 1981 while performing in Lancaster, England, Grahame was taken ill. The local hospital wanted to perform surgery immediately, which she refused. Contacting her former lover, actor Peter Turner, she requested to live in Liverpool, in the home of his mother. Grahame requested that Turner not contact medical people or her family but Turner did so, as he was concerned about her health. According to Turner's book, Film Stars Don't Die in Liverpool, his local family doctor told Grahame she had a cancerous tumor in her abdomen "the size of a football". Breast cancer is not mentioned in the book. Peter Turner informed two of Grahame's children, Timothy and Paulette, who were in the United States, of her illness. They travelled to Liverpool deciding to take their mother back to the United States against the wishes of the doctor, Grahame, Peter Turner and his family. After staying six days at the home of Peter Turner's mother, on 5 October 1981 Grahame was flown back to the United States by her two children where she was immediately admitted to St. Vincent's Hospital in New York City. She died in the hospital a few hours after admittance at the age of 57. Her remains were interred in Oakwood Memorial Park Cemetery in Chatsworth, Los Angeles. Grahame had kept an apartment at the New York City complex Manhattan Plaza. The community room at the complex is dedicated to Gloria, with her portrait hanging on the wall.

How long was she in the hospital
She died in the hospital a few hours after admittance