Following graduation from Creston High School, Wallace won a full scholarship to Parsons College in Fairfield, Iowa. She was a member of the Delta Nu Chapter of Delta Zeta Sorority. At Parsons she majored in English and Theater, performing in such productions as Brigadoon and The Music Man.

As soon as she graduated from college, Wallace escaped from Iowa to New York with $148 in her pocket. She supported herself by performing in summer stock, typing scripts, doing commercials and working as a substitute English teacher in the Bronx. After performing for a year in a Greenwich Village nightclub, Wallace and four fellow entertainer friends formed an improvisational group called The Fourth Wall. In 1968, Wallace appeared for a year Off-Broadway with the group.

Wallace was known for her tall frame, red hair, and distinctive laugh. To her fans, Her career spanned six decades in TV, in film, and on stage. Wallace was best known as an actress, game show panelist, voice artist, and comedian, primarily remembered for her roles in television situation comedies. She appeared 75 times on The Merv Griffin Show where she was personally recruited to play the receptionist Carol Kester on The Bob Newhart Show. Soon after that show ended she was cast as the voice of elementary school teacher Edna Krabappel on the animated series The Simpsons, for which she won an Emmy in 1992.

Diagnosed with breast cancer in 1985, she became a cancer activist, traveling across the country to speak to groups on behalf of the American Cancer Association. Wallace married hotelier Dennis Hawley on May 18, 1986 in a Buddhist ceremony. The couple adopted an infant son, Michael Wallace "Mikey" Hawley. She spent many months as a caregiver for her beloved husband before he died from pancreatic cancer in June 1992. On January 27, 2007, Wallace won the Gilda Radner Courage Award from Roswell Park Cancer Institute for helping educate Americans about the importance of early cancer detection and inspiring others through her 20 years as a breast cancer survivor. Wallace was a member of Delta Zeta sorority and was named the Delta Zeta 2010 Woman of the Year at the 2010 Biennial National Convention in Tucson, Arizona.

Wallace pinned her autobiography, "Don't Look Back, We're Not Going That Way." The title comes from a phrase her father often used, and she says she acquired both her sense of humor and tenacity from him. "He was a truly hilarious man whose dreams eluded him," Wallace says.

The subtitle of Wallace's Book explains some of the subjects she talks about when the ever-optimistic Wallace puts on her speaker's hat: "How I overcame a rocky childhood, a nervous breakdown, breast cancer, widowhood, fat, fire and menopausal motherhood and still manage to count my lucky chickens." Wallace never forgot her roots and often came back to Creston to visit family and friends and to help out with the centennial, Relay for Life and high school graduations.

In 2005, she was part of the first CHS Hall of Fame inductees. During her acceptance speech, Wallace included her comedic flare saying, "Someone downtown today said they'd heard I was going to be 'ignited' into the Hall of Fame. So, if you want to light me on fire, now's the time!"