Leonor Varela was born on December 29, 1972, in Santiago de Chile, Chile, to Leonor Palma, a massage therapist, and Francisco Varela, a biologist, neuroscientist, and philosopher. Her family fled to Costa Rica to escape the dictatorship of Augusto Pinochet, and they later resided in Germany, the United States, and France, where Varela studied.
In the 1990s, Varela appeared in several Chilean and European productions, including the soap opera Tic Tac, Pony Trek, Sous le soleil, Shooting Stars, A Legend to Ride, Le juste, and Bouge!. Her career in Hollywood began in 1998 when she starred opposite Leonardo DiCaprio in The Man in the Iron Mask. She also appeared in The Bible Collection: Jeremiah and Cleopatra, a TV movie in which she played the title character opposite Billy Zane and Timothy Dalton.
In the early 2000s, Varela appeared in a number of films, including The Tailor of Panama, Texas Rangers, Blade II, Paraíso B, and Pas si grave. She also had a short recurring role in the Fox Television show Arrested Development and was nominated for the Ariel Award for Best Actress for her role in Innocent Voices.
In 2005, Varela appeared in the film Americano and had roles in Goal II: Living the Dream and Where God Left His Shoes. She also appeared in the TV series Como ama una mujer, produced by Jennifer Lopez.
In 2008, Varela screened her films Sleep Dealer and Hell Ride at the Sundance Film Festival.