Beginning her film career in 1929 and on Broadway in the early 1930s, Arden's first major role was in the RKO Radio Pictures drama Stage Door (1937) opposite Katharine Hepburn, followed by roles in the comedies Having Wonderful Time (1938) and the Marx Brothers' At the Circus (1939). She received an Academy Award nomination for Best Supporting Actress for her role in Mildred Pierce (1945).
Somewhat surprisingly for an actress of Arden's refinement and wit, she appeared to good effect in a number of films noir, some exceptionally high-profile, including Mildred Pierce, The Unfaithful (1947), The Arnelo Affair (1947), Whiplash (1948), and Anatomy of a Murder (1959).
Later in her career, Arden moved to television, playing a sardonic but engaging high school teacher in Our Miss Brooks, for which she won the first Primetime Emmy Award for Outstanding Lead Actress in a Drama Series. She also played the school principal in the film musicals Grease (1978) and Grease 2 (1982).

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