Parker Christian Posey was born in Baltimore, Maryland. She is the daughter of Lynda (Patton), a chef, and Chris Posey. She has a twin brother, Christopher. Posey's first name was a tribute by her father to 1950s supermodel Suzy Parker.
After Posey's birth, the family moved to Laurel, Mississippi, where her mother worked as a chef and culinary instructor for the Viking Range Corporation in Greenwood, and her father operated a car dealership, Posey Chevrolet, in Laurel.

Posey attended the State University of New York at Purchase, where she studied drama and roomed with actresses Sherry Stringfield and Orlagh Cassidy.
Posey made her first break in television when she won the role of Tess Shelby on the daytime soap opera As the World Turns. Posey's first major role in a feature film was in Dazed and Confused (1993), a cult classic featuring Ben Affleck, Matthew McConaughey, and Jason London.

Throughout the late 1990s, Posey starred in 32 independent films and was named "Queen of the Indies". These films include Personal Velocity, Clockwatchers, Party Girl, and The House of Yes, for which she received positive reviews for her portrayal of a delusional woman in love with her own brother.
She is part of the acting ensemble that appears in director Christopher Guest's films, including four of his mock documentaries: Waiting for Guffman in 1996, Best in Show in 2000, A Mighty Wind in 2003, and For Your Consideration in 2006. Posey is also a favorite of director Hal Hartley.
She appeared in Henry Fool (1998), two of his shorts, Opera No. 1 (1994; with Adrienne Shelley), Sisters of Mercy (2004), and his most recent film, Fay Grim (2006). Posey also had a notable role as the best friend of Adam in the 2005 film Adam and Steve.

Posey has had supporting roles in several big budget studio films, including You've Got Mail (1998), Scream 3 (2000), Josie and the Pussycats (2001), Laws of Attraction (2004), Blade: Trinity (2004) and Superman Returns, playing Kitty Kowalski, Lex Luthor's ditzy sidekick