Bibi Andersson was born as Berit Elisabeth Andersson in Kungsholmen, Stockholm, the daughter of Karin (née Mansion), a social worker, and Josef Andersson, a businessman. She studied acting at the Terserus Drama School and at the legendary Royal Dramatic Theatre School in Stockholm.
In 1990, she worked as a theatre director in Stockholm. In the late 1980s and early 1990s, Andersson worked primarily in television and as a theatre actress, working with Bergman among others. She was also a supervisor for the humanitarian project Road to Sarajevo.
In 1996, she published her autobiography Ett ögonblick (A Moment, or, literally, A Blink of the Eye). She has been married (1960, divorced) to the director Kjell Grede with whom she has a daughter, Jenny, and, secondly (1978, divorced), to the politician and writer Per Ahlmark. Since 29 May 2004, Andersson has been married to Gabriel Mora Baeza. In 2009 she suffered a massive stroke and is since hospitalized, unable to speak.