Born Marjorie Elizabeth Millsap in Los Angeles, she started seeking film roles after graduating from high school. She pestered Film studios for bit parts, only ending up in New York working on the stage. Shortly thereafter, Hollywood noticed her and she was beckoned in at the front entrance of the studios who had denied her. At 18, she signed with RKO Pictures and began working with Wheeler & Woolsey; her voice was high-pitched and rather flat, but entirely appropriate for her cute, puppy-love screen characters. Her vivacious personality really came across on the screen, especially in her scenes opposite Wheeler, and she was so identified with the comedians that she seldom appeared apart from them.
She withdrew from the series after producer David O. Selznick tampered with her performance in Girl Crazy; she returned when Selznick's successor Mark Sandrich cast her in two well-received features in 1934. By this time her singing voice was warmer and better modulated. RKO replaced her with Mary Carlisle and then Betty Grable, but the public kept asking for Dorothy Lee. She returned in 1935 for two final appearances.
Her marriage of two years (to Robert Booth) ended in divorce. In the early 1940s, after Robert Woolsey had died, Bert Wheeler was struggling to re-establish himself as a solo performer, and asked Dorothy Lee to tour with him in vaudeville. She immediately interrupted her private life to help her old friend.
Dorothy Lee lived to be 88, and enjoyed hearing from fans. She refused most requests for current photographs, however, because she thought people could not reconcile her octogenarian self with the teenaged face they knew from movies.