Judd was born in Granada Hills, California to Michael Ciminella, Jr., an Italian American marketing analyst for the horseracing industry, and Naomi Judd, a well-known country music singer; she has a half-sister, Wynonna Judd, who is a country music superstar. At the time of her birth, her mother was working as a nurse, and had only become well-known as a singer along with her daughter Wynonna in the late 1970s. Judd's parents divorced in 1972, and in 1974, her mother took her back to her own native Kentucky, where Judd grew up in poverty, as the family sometimes lived without running water, electricity, or a telephone.

Judd was raised in her mother's Baptist religion, and attended twelve schools before college. She was a sister of the sorority Kappa Kappa Gamma and is a Phi Beta Kappa alumna of the University of Kentucky, where she majored in French and minored in anthropology, art history, theater, and women’s studies. She did not graduate with her class, leaving university early to drive cross-country in pursuit of an acting career in Hollywood, where she studied with well-respected acting teacher, Robert Carnegie, at the Playhouse West. During this time, she worked as a waitress at “The Ivy” restaurant.

Judd began acting on television, and appeared as Ensign Robin Lefler, a Starfleet officer, in a 1991 episode of Star Trek: The Next Generation. From 1991 to 1994 she had a reoccurring role as Reed, the daughter of Alex (Swoosie Kurtz), on the NBC drama Sisters. She made her feature film debut in 1992's Kuffs, and had the starring role in 1993's independent film, Ruby in Paradise, for which she received good reviews. She also had a role in the 1994 Oliver Stone film Natural Born Killers, but her scenes were cut from the final print. She gained further critical acclaim for her role in 1995's Smoke and Heat.

By the end of the 1990s, Judd had managed to achieve significant fame and success as a leading actress, after leading roles in several thrillers that performed well at the box office, including Kiss the Girls in 1997 and 1999's Double Jeopardy. Several of her early 2000s films, including 2001's Someone Like You and 2002's High Crimes, received only moderate reviews and mixed box office, although she did receive positive notices for her performance in the 2004 biography of Cole Porter, De-Lovely, opposite Kevin Kline.

During the 1990s, Judd dated athlete Brady Anderson, singers Lyle Lovett and Michael Bolton, and actors Matthew McConaughey and Robert DeNiro. She became engaged to Scottish Indy Racing League driver, Dario Franchitti, in December of 1999, and the two were married at Skibo Castle, near Dornoch, Scotland, on December 12, 2001.

Whenever her schedule allows, Judd regularly attends University of Kentucky basketball games, frequently sitting next to Donna Smith (wife of UK Coach Tubby Smith), or in the student section. Last year, she was a guest columnist for a local Kentucky newspaper, writing about the NCAA Championships. She is frequently sought out for celebrity camera shots during televised games. At the request of her cousin, she posed for a poster wearing only a hockey jersey for fundraising purposes for her alma mater's hockey team. She is also an avid practioner of yoga, cooking and gardening.

Judd is active in humanitarian and political causes. She was appointed Global Ambassador for YouthAIDS, an international organization promoting AIDS prevention and treatment, and speaks and demonstrates at pro-choice events.

When in Manhattan, she attends services at a charismatic Missionary Baptist Church. She and her husband divide their time between a home in Scotland and their farm in Tennessee.