Hefner was born in Chicago, Illinois. She is the daughter of Mildred (Williams) and Hugh Hefner. Her parents had separated by the time she was five. When her mother remarried, she moved to Wilmette, Illinois. There she graduated from New Trier High School. She attended the National Music Camp at Interlochen during the summers from 1964 to 1968.
In 1982, she became President of Playboy Enterprises, and was made chairman of the board and CEO in 1988. The company acquired adult-oriented businesses such as Spice Network and ClubJenna.
She married former Illinois state senator william A. Marovitz, a real estate developer and attorney in 1995, and she lives in Chicago. They divorced in 2013 and have no children. Marovitz was sued by the Securities Exchange Commission for allegedly using inside information to trade illegally in shares of Playboy, which was against Hefner's warning. In 2011, he settled out of court for $168,352.
On December 8, 2008, she announced her plans to step down as CEO of Playboy as of January 31, 2009. Hefner said that the election of Barack Obama as the next U.S. President had inspired her to give more time to charitable work, and that the decision to step down was her own. "Just as this country is embracing change in the form of new leadership, I have decided that now is the time to make changes in my own life as well," she said.
In May 2011, she was named executive chairman of Canyon Ranch Enterprises, a resort company that operates six premier spa destinations and an online website providing health and wellness advice.
When she left Canyon Ranch Enterprises in 2015, she became chairman of Hatch Beauty, a brand and product innovation company in the personal care space, and she also joined the board of RDO Companies, a $3 billion family owned agricultural conglomerate.