Russell was born in Fountain Valley, California to David Russell, a Nissan Motors executive, and Stephanie Stephens; she has an older brother, Todd, and a younger sister, Julie. Russell grew up in Dallas, Texas, Mesa, Arizona and Denver, Colorado.

Russell first found her way onto television as a cast member of the New Mickey Mouse Club variety show on the Disney Channel. She was on the show from 1991 to 1993, and in the last year starred with future pop-stars Christina Aguilera, Britney Spears, and Justin Timberlake.

Several appearances on film and TV followed, with one of her most significant pre-Felicity roles coming in the 1996's The Babysitter's Seduction. However, it was a fairly stereotypical TV movie, with melodramatic overtones. She had a role in the shortlived soap opera series Malibu Shores the same year. Russell also appeared in Bon Jovi's music video "Always" with Jack Noseworthy.

From 1998 to 2002, Russell starred as the title character in Felicity. Russell's long and curly hair was one of her character's defining characteristics, and a drastic hairstyle change at the beginning of the show's second season was considered to be the cause of a significant drop in the show's ratings. This reportedly led to a new policy at The WB where major changes in appearance by on-screen talent must be approved by the network: WB network executive Susanne Daniels said in early 2000, " Nobody is cutting their hair again on this network. " In reality, the network didn't become that strict, but new policies were enacted requiring hairstyle changes to be approved by management.

Russell herself was surprised at the reaction, later stating:" People still take it really personally. They come up to me at breakfast places like, 'When are you growing your hair back?' ".

The ratings drop also coincided with the show's move to Sunday night, so it is unclear exactly how much effect the hairstyle change actually had.

When Felicity ended, Russell took a break from acting and even considered quitting the profession. Her next role was as part of the Mel Gibson-led bio-pic We Were Soldiers in 2002, where she played the wife of an American serviceman. She moved to New York City and took about two years to avoid the business of Hollywood, spending time with friends.

She won a golden globe in 1999.

The actress made her Off-Broadway stage debut in 2004, appearing with Jeremy Piven, Andrew McCarthy, and Ashlie Atkinson in Neil LaBute's Fat Pig. In 2005 she returned to television and film, first with an appearance in the Hallmark Hall of Fame TV movie Magic of Ordinary Days. In theatrical release was The Upside of Anger, where she appeared alongside Kevin Costner and Joan Allen. She will be in the mid-year miniseries Into the West.

Although a number of her Felicity co-stars went on to appear in J.J. Abrams's TV series, Alias, Russell declined invitations to be part of the show. In a seminar at the Museum of Television and Radio, Abrams said, "I've asked Keri if she would ever do it, and I usually get this, sort of like, giggle—and then she hangs up." In 2005, he asked her to join the cast of Mission: Impossible III, and she accepted. The film was released on May 5, 2006.

Russell's latest movie is Butterfly: A Grimm Love Story, titled Rothenburg for its German release. She plays Katie Armstrong, a graduate student who writes a thesis paper on an infamous cannibal murder case. In the process, Armstrong becomes obsessed with the dark side and begins to lose herself. The film was set to open in Germany on March 9, 2006, but Armin Meiwes succeeded in getting a German court to issue an injunction banning the film in that country. Meiwes, who killed and partially ate a man in 2001, served as inspiration for the film. In requesting the injunction, he complained that the film was a sensationalized account of his crime.

In 2005, several reports claimed that Russell was set to adopt Scientology, after working with actor Tom Cruise, who is a Scientologist, on Mission: Impossible III. Russell's representative subsequently threatened to sue the reporter who first made the claim. Stories about the incident had noted that Russell is of Jewish heritage and religion, although older reports, which had originally suggested her conversion to Scientology, had mentioned that she was once a member of the Mormon faith.