Mills, the daughter of TV executive Ted Mills, was only eight years old when she made her TV debut on "The Patti Page Show". After a hiatus for schooling, she landed her first film role, one scene opposite Frank Langella in "Diary of a Mad Housewife" (1971), while a sophomore at Bennington College. Mills transferred to Yale and finished her education at LAMDA. Moving to NYC, she performed in Off-Broadway productions, played Juliet in a touring company of "Romeo and Juliet" and later co-starred with Geraldine Fitzgerald in the New York Shakespeare Festival production of "A Collier's Friday Night". Testing the waters in Los Angeles, she arrived in 1979 and was soon cast in a production of "Voices" which in turn led to a guest appearance on "Kaz". After appearing in her first TV-movie, "Rape and Marriage: The Rideout Case" (CBS, 1980), Mills was cast as drama teacher Sara Conover on the short-lived high school sitcom "Making the Grade" (CBS, 1982) before playing Tracy Renko, the hairdresser sister of a cop (Charles Haid) on five episodes of NBC's "Hill Street Blues" during the 1982-83 season. Additional TV-movie work followed, including "Prototype" (CBS, 1983), in which she was Dr. Rebecca Bishop in the mock Frankenstein story. In 1987, Mills made two appearances as a wealthy ditz on the sitcom "I Married Dora". After her stint as Norma Arnold, forever seeking equilibrium in a household marked by the uproar of the 60s, growing teens, and a husband disgruntled with the realities of post-war American life, Mills began to land better roles in TV longforms. She was Susan Dey's business partner in "I Love You Perfect" (ABC, 1989) and the mother of a down syndrome child in a tug-of-war with his caretaker in "Jonathan: The Boy Nobody Wanted" (NBC, 1992). Mills also was a delightful co-host of ABC's short-lived daytime attempt, "The Home Show" in 1989. Since 1993, she has played the recurring role of Marjorie, sister to Jane Seymour's "Dr. Quinn, Medicine Woman".
Alley has also remained active in theater in L.A., producing and/or acting in various productions, including "The Playboy of the Western World" in 1996, opposite her husband Orson Bean.