Booth's father was a Wall Street stock broker and her mother was a housewife. They had moved from rural Indiana to New Rochelle, New York. After performing in high school productions, Booth went on to study drama in New York City, where she worked as a waitress. Booth married John Cleese on February 20, 1968.

Booth secured parts in episodes of Monty Python's Flying Circus and in the Python film And Now for Something Completely Different. She also appeared in Monty Python and the Holy Grail as a woman accused of being a witch; in How to Irritate People, a pre-Monty Python film starring Cleese and other future Monty Python members; and in The Strange Case of the End of Civilization as We Know It (Cleese's Sherlock Holmes spoof, as Mrs. Hudson).

Booth and Cleese went on to write and co-star in Fawlty Towers (1975, 1979). She also appeared in a short film titled Romance with a Double Bass, adapted by Cleese from a short story by Anton Chekhov.

Booth and Cleese divorced in 1978, but have remained close friends. In 1971 Booth gave birth to a daughter, Cynthia, who appeared alongside her father in both A Fish Called Wanda and Fierce Creatures.Booth played various roles on British television, including Sophie in Dickens of London, Mrs Errol in a BBC adaptation of Little Lord Fauntleroy, and Miss March in a dramatisation of Edith Wharton's The Buccaneers.

Booth ended her acting career in 1995. She works as a psychotherapist in London, a registrant of the BPC. UKTV Gold: Sitcoms: Fawlty Towers: Where are they now? Camden New Journal For 30 years Booth had declined to talk about Fawlty Towers until she agreed to participate in a documentary about the series for the digital channel G.O.L.D. in 2009.

Booth is married to John Lahr, author and senior drama critic of The New Yorker. They live in London.