Blair was born Selma Blair Beitner (June 23, 1972)) in Southfield, in the metropolitan area of Detroit, Michigan, the youngest child of Judge Molly Ann (née Cooke) and Elliot I. Beitner.
Blair had a Jewish upbringing – her Hebrew name is Bat-Sheva. Her father was an attorney, active in the U.S. Democratic Party and labor arbitrator until his death in 2012 at the age of 82. Her parents divorced when Blair was 23; she subsequently legally changed her surname. She has three older sisters – Katherine, Elizabeth, and Marie Beitner.
Blair attended Hillel Day School, a Jewish day school in Farmington Hills; and Cranbrook Kingswood in Bloomfield Hills soon after, she spent her freshman year (1990–91) in Kalamazoo College, where she studied photography and acted in the play The Little Theater of the Green Goose. At that time, she wanted to be a ballerina and a horse trainer.
Later, at the age of 20, Blair moved to New York City, where she lived at The Salvation Army in poor living conditions. She attended NYU, as well as acting classes at the Stella Adler Conservatory, the Column Theatre, and the Stonestreet Screen Acting Workshop; later, she returned to Michigan to finish her studies. After transferring from New York University, she graduated magna cum laude from the University of Michigan in 1994 with a Bachelor of Fine Arts in Photography, Bachelor of Arts in Psychology, and a double major in Fine Arts and English. After graduating from Michigan, Blair returned to New York City to pursue a career in the arts.
Blair was considered to have a breakthrough in 1999; first, for her leading role on The WB teen sitcom Zoe and soon after for her starring role in the teen drama Cruel Intentions. Later, Blair starred in other notable films including Down to You (2000), Legally Blonde (2001) and The Sweetest Thing (2002).
She achieved international fame as a result of her portrayal of the heroine Liz Sherman in the fantasy films Hellboy (2004) and Hellboy II: The Golden Army (2008). Other notable films include The Fog (2005), Purple Violets (2007), The Poker House (2008), Columbus Circle (2012) and Mothers and Daughters (2016).
Blair also portrayed the leading role in the American remake of Kath & Kim as Kim (2008–2009), and on the sitcom Anger Management (2012–2014). In 2016, Blair returned to television portraying socialite Kris Jenner in the first season of FX true crime anthology series American Crime Story.
In 2011, Blair lent her voice to narrate the Holocaust-related audio documentary The Diary of Anne Frank.