Heller was born in Brooklyn, New York City, and grew up in West Hempstead, New York, on Long Island, of Russian Jewish heritage. After initially attending Emerson College in Boston, she returned to Long Island to graduate in 1969 from Adelphi University, where she studied theater.

The summer after graduation, she was cast in an Off-Broadway production of Godspell. She went on to do the Broadway musical Grease, playing Rizzo. In 1978, Heller moved from New York to California to pursue screen work.

Heller had a starring role as Carol in the 1979 TV movie Can You Hear the Laughter? The Story of Freddie Prinze. She has made guest appearances in television series including Murder, She Wrote, Less Than Perfect, ALF, Nip/Tuck, Judging Amy, Felicity, the children’s series Drake & Josh, Night Court, Fame, and The White Shadow. She was a regular on the one-season program Husbands, Wives & Lovers (1978). Heller played leading roles in three short-lived sitcoms: Second Chance (1987), “Better Days (TV series),” and Mama Malone (1984). Her TV-movie appearances include Can You Hear the Laughter? The Story of Freddie Prinze and And Your Name is Jonah (both 1979). In 2018, Heller reprised the role of Lucille LaRusso in episodes of seasons one and two of Cobra Kai, a YouTube Red series.

Heller also played the role of Barbra Streisand’s mother in the stage performances of Streisand’s Timeless concerts in 2000. She performed the role after having been diagnosed with breast cancer the year before and undergoing a double mastectomy and chemotherapy and radiation treatments.

Her role as Alice, one of the television’s first lesbian characters, on the TV series Soap received mixed reviews, with criticism primarily directed not for at acting but at the stereotyping of her character. The Boston Herald said that the characterization shows how “the networks have generally depicted lesbians either as suicidal losers or sexual predators.” For example, it identifies Alice as “TV’s first recurring lesbian character,” noting that she “first tries to throw herself off a bridge, then falls for Jodie (Billy Crystal), a confused gay man, and finally runs off.”. Ahead of filming, producers ordered Heller’s newly permed hair straightened at the network’s insistence. Of a later episode in which Alice introduces her girlfriend, Heller said, “I went to kiss her in rehearsals and they said, ‘No no no … you can’t do that.’ I said, ‘But she’s my girlfriend!’ ‘No, no no no, we can’t do that, we just cannot do that.’ So it was so careful, it was so delicate in those days that you couldn’t really do your thing. … They wanted me to be a heterosexual homosexual.” Heller would appear as a lesbian character again in a 2010 episode of Grey’s Anatomy “Almost Grown,” playing the partner of a female patient with a brain tumor.