Clayton was born in Savannah, Georgia. She graduated from Johnson C. Smith University with a bachelor's degree and from North Carolina Central University with a master's degree. Clayton worked on the Soul City project in Warren County, North Carolina before she became the Assistant Secretary for community development for the North Carolina state Department of Natural Resources and Community Development (1977–1981).
From 1982 to 1992, Clayton served as an elected member and chair of the Warren County board of commissioners. She was elected to the United States House of Representatives as a Democrat in 1992, and was elected at the same time in a special election to fill out the remaining months of the term of Congressman Walter B. Jones, Sr.. Clayton and Mel Watt were the first African Americans elected to the House from North Carolina since 1898 (since Clayton won the special election, she took office before Watt). Clayton gained national attention as president of her Democratic freshman class. Clayton had a liberal voting record, although she opposed bills relating to trade with China since the bills would harm her district. Clayton retired from Congress at the end of her fifth term in 2003.
In 2003, the United Nations Food and Agricultural Organization (FAO), based in Rome, named former Congresswoman Clayton an Assistant Director-General, responsible for tracking progress in the FAO efforts to increase agricultural productivity worldwide and to help reduce hunger and poverty in the world.