Moore was born in Fayetteville, NC to Peter Moore Smith, a military judge and army colonel, and Anne, a psychiatrist and social worker who emigrated from Scotland; she has a brother, Peter Moore Smith, Jr. (born 1965) and a younger sister, Valerie. As a result of her father's job, she lived in twenty-three places across the United States and Germany during her youth.

Moore attended Frankfurt American High School in Frankfurt, Germany, graduating in 1979. She received her Bachelor's degree at the School of Fine Arts in Boston University.

Moore moved to New York City in 1983, working as a waitress before being cast in the dual roles of Frannie and Sabrina Hughes on the soap opera As the World Turns, for which she won a Daytime Emmy Award; she played the roles from 1985 to 1988.

Moore began starring in feature films in the early 1990s, mostly appearing in supporting roles in films like The Hand That Rocks the Cradle and The Fugitive. Her part in 1993's Short Cuts gained her critical acclaim and recognition, and she was cast in several high-profile Hollywood films, including 1995's romantic comedy Nine Months, and 1997's summer blockbuster The Lost World: Jurassic Park. Her role in the well-reviewed independent film, Safe, also attracted critical attention.

During the late 1990s and early 2000s, Moore appeared in a series of films that received Oscar recognition, including her roles in Boogie Nights ("Best Supporting Actress" nomination), The End of the Affair ("Best Actress" nomination) and her two 2002 films, Far From Heaven ("Best Actress" nomination) and The Hours ("Best Supporting Actress" nomination). During this period, she also appeared in the commercial successes Hannibal (controversially replacing Jodie Foster as Clarice Starling) and The Forgotten, and in Paul Thomas Anderson's follow-up to Boogie Nights, Magnolia.

Moore has been married three times; she was married to Sundar Chakravarthy from November 21, 1983 to October 12, 1985 and to John Gould Rubin from May 3, 1986 to August 25, 1995. In 1996, she began a relationship with director Bart Freundlich; they married on August 23, 2003. The couple have two children: a son, Caleb Freundlich (born December 4, 1997), and a daughter, Liv Helen Freundlich (born April 11, 2002). She is a noted pro-choice activist and donated money to John Kerry's presidential campaign.

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