Grace Goodhue was the only child of Andrew Issachar Goodhue, a mechanical engineer, and Lemira Barrett Goodhue. After attending local schools, Grace enrolled at the University of Vermont, where she earned a bachelor of arts degree in 1902. Influenced by a neighbour who worked with the hearing-impaired, she moved to Northampton, Massachusetts, and joined the Clarke Institute for the Deaf, where she learned a method of teaching the deaf to communicate with lipreading rather than sign language. In Northampton she met a young lawyer, Calvin Coolidge, who was serving on the city council. Married on October 4, 1905, they had two sons, John in 1906 and Calvin, Jr., in 1908.

While Calvin rose in local government, Grace kept completely out of politics, deterred by his laconic remark, “Better not.” After he became governor of Massachusetts in 1919 and began working in Boston, she remained in Northampton with their sons. Calvin's election as vice president in 1920 took the family to Washington, D.C., where they lived at the Willard Hotel. Grace became an immediate favourite for her wit, charm, and fondness for animals. Although her husband was known for his miserly ways, he indulged her interest in fashion and even bought some of her clothes himself. Active in many popular causes, including the Red Cross (Red Cross and Red Crescent) and the Visiting Nurse Association, Grace took no stand on controversial issues such as women's rights. But her “flapper” fashions, her interests in baseball and hiking, and the fact that she had once had her own career made her a popular model for young women. Respecting Calvin's wishes, she did not speak to the press, but she once gave a five-minute sign language speech at a luncheon.

Grace earned enormous sympathy from Americans in the summer of 1924 when her son Calvin, Jr., died after a blister on his foot developed into blood poisoning. Unlike earlier first ladies, who withdrew from all public appearances at times of tragedy, she set a precedent that her successors would follow by resuming official duties within months.

To take her mind off the death of her son, Grace focused on refurbishing the family quarters of the White House. Although she persuaded Congress to pass a law allowing the White House to accept donations from individuals, few Americans contributed. One major structural change in the White House during Grace's tenure was the addition of a third floor and a “sky parlour,” a sunroom that became a favourite area of later presidents.

After her husband refused renomination in 1928, Grace and Calvin moved back to Northampton, where he died on January 5, 1933. She continued to work for several causes, including those related to the deaf, traveled extensively, and wrote articles for various magazines.

Eventually she built her own house, which she lent to navy personnel during World War II. She died of heart disease in 1957 and was buried beside her husband and son at the Plymouth Notch Cemetery in Plymouth, Vermont. Like other presidents' wives, she lamented that she had to subjugate her private self to her public role: “This was I and yet not I—this was the wife of the President of the United States and she took precedence over me.” In the process, however, Grace Coolidge joined that small group of first ladies who are rated as more successful at their jobs than their husbands were at their presidencies.