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Bancroft was born Anna Maria Louisa (or Luisa) Italiano on September 17, 1931, in the Bronx, New York City, the middle of three daughters of Mildred (née Di Napoli), a telephone operator, and Michael G. Italiano, a dress pattern maker. Both of her parents' surnames were toponymic. Her parents were Italian immigrants from Southern Italy. In an interview, she stated that her family was originally from Muro Lucano, in the province of Potenza. She was raised in the Roman Catholic faith. Bancroft was raised in Little Italy, in the Belmont neighborhood of the Bronx, attended P.S. 12, later moving to 1580 Zerega Ave.

Bancroft's Broadway debut in the two-character drama Two for the Seesaw (1958), brought her wide recognition for the depth of her talent and garnered her a Tony Award for best supporting actress. She won the Academy Award for Best Actress for her performance as Annie Sullivan in The Miracle Worker (1962), and was nominated for an Academy Award for Best Actress for her performance as Mrs. Robinson in The Graduate (1967).

Bancroft continued to have a successful career in film and television. She starred in a number of other films, including The Elephant Man (1980), 84 Charing Cross Road (1987), and Agnes of God (1985), for which she was nominated for an Academy Award for Best Actress.

Bancroft was married to director Mel Brooks from 1964 until her death in 2005. They had one son, Max Brooks.