Shulamit Adler was born in Tel Aviv. Her mother was a seamstress and her father was a carpenter, both descended from Polish rabbinical families. She was sent to boarding school during World War II while her parents served in the British Army. As a youth she was a member of the socialist Zionist Hashomer Hatzair youth movement and the Palmach. During the 1948 Arab–Israeli War she was involved in military struggles for the Old City of Jerusalem and was captured by Jordanian forces. Following the establishment of the state of Israel, she worked with child refugees and helped establish a school for immigrant children. She taught school while studying law.
In 1965 Aloni was elected to the Knesset on the list of the Alignment, an alliance of Mapai and Ahdut HaAvoda, and subsequently founded the Israel Consumers Council, which she chaired for four years. She left the Alignment in 1973 and established the Citizens Rights Movement, which became known as Ratz. The party advocated electoral reform, separation of religion and state and human rights and won three seats in the 1973 Knesset elections. Ratz initially joined the Alignment-led government with Aloni as Minister without Portfolio but she resigned immediately in protest at the appointment of Yitzhak Rafael as Minister of Religions. Ratz briefly became Ya'ad – Civil Rights Movement when independent MK Aryeh Eliav joined the party, but returned to its original status soon after.
Throughout the 1970s Aloni attempted to create a dialogue with Palestinians in hopes of achieving a lasting peace settlement. During the 1982 Lebanon War she established the "International Center for Peace in the Middle East". In the run-up to the 1984 elections, Ratz aligned with Peace Now and the Left Camp of Israel to increase its size in the Knesset to five seats. In 1992, she led Ratz into an alliance with Shinui and Mapam to form the new Meretz party, which won 12 seats under her leadership in the elections that year. Aloni became Minister of Education under Yitzhak Rabin but was forced to resign after a year due to her outspoken statements on matters of religion. As Education Minister, she also criticized organized tours by Israeli high school pupils to Holocaustconcentration camps on grounds that such visits were turning Israeli youth into aggressive, nationalistic xenophobes, claiming that students "march with unfurled flags, as if they've come to conquer Poland". She was reappointed Minister of Communications and Science and Culture and served until 1996 when she retired from party politics..
In a 2002 interview with American journalist Amy Goodman, Aloni said that charges of antisemitism are "a trick we use" to suppress criticism of Israel coming from within the United States, for criticism coming from Europe "we bring up the holocaust".