Although she came from a show business family (her grandfather was the comic Mickey Katz, her mother was singer Jo Wilder), Grey was not allowed to perform as a youngster. Nevertheless, she did hang around backstage when her father was appearing on Broadway. After high school, Grey studied with Sanford Meisner at the Neighborhood Playhouse and made her professional debut dancing in a Dr. Pepper TV commercial. Her stage work began as an understudy in the New York production of "Album", directed by Joan Micklin Silver (1980); she later appeared in the Chicago production of the play, alongside Alan Ruck, who would later be one of her co-stars in "Ferris Bueller". Grey's actual Broadway debut did not come until 1993 with "Twilight of the Golds", in which she portrayed a vacuous woman facing the chance that her unborn child might grow up to be homosexual.
The actress found steadier employment in features. After making her debut as Daryl Hannah's wild Italian friend in "Reckless" (1984), Grey went on to play a gangster's moll in Francis Ford Coppola's "The Cotton Club" and a freedom fighter battling Russian and Cuban invaders in "Red Dawn" (both 1984). By the late 80s with the success of "Dirty Dancing", she had a achieved leading lady status, but subsequent juicy roles proved elusive. One possible reason could have been that she had played characters that were more sweet and awkward than overtly sexual, a type that is not often seen on the big screen. Grey appeared in a singing role alongside Madonna and Matt Dillon in the "American Playhouse" production "Bloodhounds of Broadway" (1989) but her next leading role, opposite Matthew Modine, was in the box-office disappointment "Wind" (1992). Her follow-ups, "Lover's Knot" and "Portraits of a Killer" (both 1996), also failed to spark the excitement of critics and audiences.
Moving to the small screen, Grey has played a handful of highly dramatic roles, most notably Rita Schwerner, wife of the slain civil rights worker Mickey Schwerner (Tom Hulce) in the superior TV docudrama "Murder in Mississippi" (NBC, 1990). She has also been at her best as young lawyers as in the taut "Criminal Justice" (HBO, 1990) and the above-average thriller "A Case for Murder" (USA Network, 1993). Grey also scored as an aspiring actress befriended by both an elderly widow (Shirley MacLaine) and her neighbor (Liza Minnelli) in "The West Side Waltz" (CBS, 1995). That same year, she also appeared as the spoiled rich girl former friend of Jennifer Aniston's Rachel on the hit NBC sitcom "Friends".
Grey essentially played herself in a two-season stint on the quirky ABC sitcom, "It's like, you know ..." (1999-2000). Cast as an actress called Jennifer Grey, she was game for anything, spoofing her career, her failed plastic surgery and other personal and professional successes and failures.