Oberman was born in Brent, Greater London, and has a Jewish background. She grew up in North London, attending Heathfield School for Girls, before going on to study Classics at Leeds University; however, after a year she moved to Manchester University to pursue drama. After graduating she was accepted into the Central School of Speech and Drama, where she trained as an actor. In 1991, Oberman studied for a term at the Moscow Art Theatre School as part of her training. Oberman has spoken of how her drive for professionalism was a result of her parents’ initial concern with her career choice.

After leaving the Central School of Speech and Drama, Oberman joined the Royal Shakespeare Company. In 1993 she took part in the RSC’s award-winning production of Christopher Marlowe’s Tamburlaine as “Olympia”. This was followed by roles in The Changeling, as “Diaphanta”, A Jovial Crew in the part of “Joan Cope”, and The Beggar’s Opera where she played Molly Brazen. In 1994 she completed her run at the RSC playing in Macbeth and A Christmas Carol.

Her first major television role was in 1997 when she was cast as Zoe Gerrard, a security officer in the medical drama Casualty.

In 1998, she joined the cast of Comedy Nation, a satirical sketch show that featured some of Britain’s leading up-and-coming comedians, such as Sacha Baron Cohen, Julian Barratt, and Robert Webb. This was followed by an assortment of parts in various television productions, including a performance in a two-part story for the police serial The Bill in 2000.

She has appeared in many other TV programmes, including; The Way It Is (2000), Bob Martin (2000–2001) opposite Michael Barrymore, Lenny Henry in Pieces (2000–2001), Big Train (2002), SuperTex (2003) and in episodes of Doctors, The Last Detective, Where the Heart Is, The Bill, Casualty. She played the previously unseen character of Marion in a special half-hour episode of the monologue series Marion and Geoff in 2001.

That year Oberman was cast as series regular “Beverly Jordan” opposite Michael Barrymore in Bob Martin, and became a lead performer in the award-nominated Lenny Henry in Pieces, starring actor/comedian Lenny Henry, which ran until 2003. In 2002 Oberman joined the second and final series of the sketch show Big Train, performing beside comedians Simon Pegg and Catherine Tate.

In 2003, Oberman returned to the National Theatre in Edmond, playing opposite Kenneth Branagh in her debut at the National and Branagh’s return to acting after six years of directing. Her role as wife to Branagh’s title character was well received by critics, Norman Miller in a BBC News review commending Oberman for making a particular “impression” despite being only one part out of thirty “whirling through scenes” in a play that runs barely over an hour.

As she came from a strong legal background, her family “weren’t wildly happy” about her desire to become an actress: “My parents were always making me watch Rumpole of the Bailey, going ‘You see? It’s just like acting, you make things up, you wear a wig and a funny outfit. Why not the law?’ But I just always wanted to act, as far back as I remember.” Her joining the Royal Shakespeare Company though, finally won her parents over. However, in a 2004 interview, Oberman noted that her father’s death seven years earlier prevented his seeing the development of her career and her national success as an actor: “I’ve come a long way in my career since he died and I wish he was here to see it. He was a big EastEnders fan so I know he’d be very, very proud of me.”

In 2004, Oberman moved away from comedy to join the popular BBC soap opera EastEnders, after she was cast as Chrissie Watts, the second wife of “one of the best-loved villains in soap history”, “Dirty” Den Watts. It was a role she played for almost two years, and which brought her “stratospheric fame”. Before long, Oberman would become one of the leading stars of the show and at the forefront of several storylines. At the time, though, television critics pointed to Oberman’s extensive theatrical background and questioned: “why would an actress with such pedigree agree to be in EastEnders?” Oberman has continuously responded by placing the move in the context of her professional exposure, noting her position as a “jobbing actress” at the time and her desire to return to drama after her recent comedic roles. Making her debut on 29 April, Oberman was viewed as an “overnight success” in the role of Chrissie, with Amy Raphael of The Telegraph feeling that the actress “easily upstaged the rest of the cast with her three-dimensional portrayal of a classic soap bitch”. In 2005, “18 million people” watched her character kill Den in a fit of rage to mark the 20th anniversary of EastEnders, with Oberman “anchoring” the show’s success that year and dominating drama as Chrissie, who “packed into a year what most soap characters do in three.” Commenting on her role two years after she left the show, Oberman concluded:

Oberman has appeared as a guest reviewer on an episode of Film 2007 with Jonathan Ross, as a contestant on a Doctor Who special of The Weakest Link. She was the second one voted off. And as a special guest performer in Tim Crouch’s two-hander The Oak Tree at the Soho Theatre. In 2004 she came a close second place on Celebrity Mastermind, the specialist subject being The Imperial Roman Family Augustus to Claudius Caesar.

Oberman is a secular Jew who has said that “Jewishness is hardwired within me. It is the centre of the wheel from which all spokes emanate”. In December 2004, Oberman married music producer Rob Cowan. In August 2006, Oberman gave birth to a daughter.

In September 2005 she was a guest on Friday Night with Jonathan Ross In 2006 she was the guest on Nigel Slater’s A Taste of My Life and in 2007 Oberman appeared on BBC One’s Saturday Kitchen. She has featured in the BBC Radio 4 show Rudy’s Rare Records.

2006 also saw Oberman plan a return to the National Theatre in Mike Leigh’s play, Two Thousand Years. Leigh had already asked Oberman to appear as part of the original cast, but she declined given her hectic schedule on EastEnders at the time. However, after she signed up for the 2006 production and began attending rehearsals before she fell ill, a blood test revealing that she was pregnant, forcing her to pull out of the play.

She took a couple of years away from acting following the birth of her daughter in August 2006. Although she undertook a one-off performance of The Oak Tree at the Soho Theatre in 2007, it wasn’t until the end of the year that she returned full-time to work in the West End revival of Boeing-Boeing, playing “Gretchen” opposite Jean Marsh and Jennifer Ellison.

It was also announced that Oberman would guest star in the second series of the revived Doctor Who, playing the character of Yvonne Hartman, whom she described as “a sophisticated sort of baddie”, with a BBC source declaring Oberman “perfect to play evil Yvonne and will be brilliant at terrorising the next generation of viewers”. The two-part series finale entitled “Army of Ghosts” and “Doomsday”, aired in July 2006, attracting audiences of 8.19 million and 8.22 million respectively. Oberman extols her appearance in Doctor Who as a career highlight, being a “confessed Whovian” or fan of the show: “Some people, their life’s ambition is to walk in and see Queen Vic, mine was to see a Tardis and a sonic screwdriver… and a Dalek!”

In 2006, Oberman signed on to the BBC One six-part comedy-drama series Sorted as series regular Amy, alongside Will Mellor. In 2008, she made a brief return to TV in the CBBC production Summerhill.

In 2007, Oberman co-wrote Three Sisters on Hope Street with playwright and neighbour Diane Samuels. The play is a reinterpretation of Chekhov’s The Three Sisters, transferring events to Liverpool after World War II and re-casting the Pozorov sisters as three Jewish Englishwomen. In an interview on Radio 4, Oberman spoke of the original inspiration and long gestation of the play:

In July 2008 Oberman continued her theatre run by starring in the world premiere of On the Rocks as Frieda Lawrence, wife of novelist D. H. Lawrence. The play, by Amy Rosenthal, follows the marriage of the Lawrences during one idyllic summer in 1916, and received generally favourable reviews, with Arts critic Michael Billington describing Oberman’s performance as “capturing Frieda’s intense love-hate relationship with her impossible partner”. The censure was echoed by Nicholas de Jongh in the Evening Standard in his less than enthusiastic review of the play, criticising Oberman for her “often unintelligible German accent”. However, most reviews followed the line taken by Benedict Nightingale of The Times in declaring Oberman to have given a “fine performance… as a gloriously sensual, blowsily defiant Frieda”.

In 2008, Samuels criticised Oberman for not acknowledging her role in interviews. Samuels said “There is a co-credit”. Tracy made a verbal contribution to the play. I don’t feel it was co-written and I never will. I regard her as an actress, who creatively collaborated with me… I’m the primary author of the piece. And Tracy claims to have written the piece. She didn’t write a word of the first draft.”

Three Sisters on Hope Street opened at the Everyman in Liverpool on 25 January 2008 before beginning a second run at the Hampstead Theatre in London. The play received “rave reviews”, being described as “an inventive reimagining” and “a bold, fresh and fruitful reinterpretation”, showcasing “lively and intelligent” writing. Philip Key in the Liverpool Daily Post praised the adaptation as successfully capturing the sensibility of Liverpool, enabling the story to “be familiar to both theatre-goers and many Liverpudlians.” Peter Fisher of The British Theatre Guide was even more ecstatic, describing the production as a “superb project” and a “superb evening’s entertainment”. However, other reviewers were more ambiguous, with Michael Coveney branding the play a “clever re-write” but poorly served by the actors involved. Similarly, The Guardian Arts editor felt the piece to be “a surprisingly faithful transposition”, which “ingeniously” solves some of the problems inherent in relocating the original, but objected to what he saw was a “dependence on authorial cleverness in finding post-war parallels to their source”.

In 2009, Oberman made several guest-starring roles in BBC television programmes, beginning with Mistresses in which she played the owner of a sex-toy company. This was followed by a part in the BBC One drama Robin Hood, as the wife of the Sheriff of York. In September, Oberman returned to the medical series Doctors five years after first appearing in the programme, undertaking the role of ‘black widow’ Cathy Harley. Oberman had a part in the “web thriller” Girl Number 9, which she playfully described as “the first Twitter-related drama that there’s ever been!” Penned by James Moran, the adult-themed online horror series was headlined as a “big step forward” for British web drama, with Oberman playing the lead detective “Lyndon” beside Gareth David-Lloyd.

She made it through to the quarter-finals of Celebrity MasterChef in 2009. She is a regular panellist on The Wright Stuff.

At the end of 2009, Oberman returned to radio to star in “Gregory Evans’ mind-boggling play” Shirleymander for Radio 4, with reviewer Moira Petty describing Oberman’s turn as Dame Shirley Porter as “freakishly real”. In 2010, Oberman remained with the radio medium, performing opposite Catherine Tate.

Oberman wrote and performed in her first BBC Radio 4 play which went out to great critical acclaim on 29 April 2010. Catherine Tate played Bette Davis and Oberman herself ( after persuasion by the producer ) played Joan Crawford with Lorelei King as Hedda Hopper. The play was Pick of The Week by Gillian Reynolds and garnered a huge amount of press interest due to the subject matter, and it being Oberman’s first radio play.

In 2011, she played Sarah in the touring production of Earthquakes in London by Mike Bartlett which was an updated, newly staged version of the National Theatre and Headlongs production earlier that year.

Since 2011, Oberman has played Auntie Val in the Channel 4 sitcom Friday Night Dinner and between 2012 to 2015, Oberman played Mrs. Purchase in Matt Berry and Arthur Mathew’s award-winning comedy, Toast of London.

In 2011 Oberman appeared in Born To Shine singing folk music and playing the guitar.

In December 2012 Oberman returned to the stage at the Hampstead Theatre in the premiere of Old Money by Sarah Wooley playing opposite Maureen Lipman to be directed by Terry Johnson. In 2015, Oberman played the role of Isabella Blow in the play McQueen, at the St James Theatre, London.

On 16 October 2012 BBC Radio 4 Broadcast her second radio play Rock and Doris and Elizabeth ( starring Frances Barber and Johnathan Hyde as Rock Hudson and Doris Day and Oberman as Elizabeth Taylor) to very positive feedback. It followed Rock Hudson’s AIDS scandal hitting the world’s media after appearing on his old friend Doris Day’s cable network show. Radio Drama Review online described it as “poignant and utterly spellbinding”.

In 2012, Oberman was a judge, alongside Yiddish scholar, David Katz, on a Channel 4 reality series, Jewish Mum of the Year. Commenting, Maureen Lipman said “It’s disgusting. It is very damaging, with anti-Semitism being what it is. Not to mention that being a Jewish mother is nothing like the way they portray it.” Former BBC chairman Michael Grade also criticised the programme, saying: “I don’t know what it was supposed to be. They seemed to cram in every cliché in the book.”

Oberman has described Israel as “a country I love”, has friends and family living there and has holidayed there throughout her life. In April 2012, and again in September 2014, she called on supporters of Israel to be more active in campaigning on Twitter. She resigned as a member of the Labour Party in 2016 due to its delay in concluding the disciplinary process of Ken Livingstone after he referred to Hitler having supported, when he came to power, Jewish emigration to Palestine.

In May–July 2013, Oberman filmed the 6 part series Give Out Girls for Sky Living/Big Talk productions as Debbie, the head of Hot Staff promotions girls.

In January 2014, Oberman played the character ,Audrey MacMurray, in the final episode of the second series of Father Brown which was shown on BBC One in their afternoon schedule and later in the evening on BBC Two in the evening. Also that year, she appeared in Crims for BBC Three playing ‘hard as nails’ Governor Riley.

In February 2019, Oberman and Rachel Riley instructed a lawyer to take action against 70 individuals for tweets which they perceived to be either libellous or tantamount to harassment, related to their campaign against antisemitism in the Labour party. In July 2020, Oberman and Riley dropped joint libel action against an individual who’d retweeted a blog they claimed was defamatory. At the withdrawal of the action the defendant stated: “Ultimately, despite press reports which suggested as many as 70 people might face legal action, I was the only person who was sued.” Oberman and Riley agreed to contribute towards the defendant’s legal costs.