Born in Baltimore on November 8, 1968, Posey was named after '50s model and sometimes-actress Suzy Parker. After attending the North Carolina School of the Arts, she attended the State University of New York.

Posey's first major role in a feature film was in Dazed and Confused (1993), where she made a distinct impression. As cheerleader Darla, she used her relatively brief screen time to display the nastier side of teen popularity. Throughout the late 1990s, Posey starred in a large number of independent films and was named Queen of the Indies by Time Magazine, which cited 32 independent films to her credit, such as, Clockwatchers and Party Girl. In 1997 alone, Posey starred in no less than five independent films.

Posey made her stage debut in 2001, and has worked regularly on the stage since. Posey also dabbles in music; she can play the mandolin. She learned to play as preparation for her role in A Mighty Wind (2003), a film in which she also sang. She used her vocal talents on several records of her ex-boyfriend, Ryan Adams, whom she dated until early 2005. Beginning in February 2006, Posey appeared in a commercial for Pepsi Cola opposite Jimmy Fallon, dancing to the song "Newton - Streamline".