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Parsons was born in Lynn, Massachusetts, the daughter of Elinor Ingebore (née Mattson), who was a native of Sweden, and Eben Parsons. She attended the Oak Grove School for Girls in Maine. After graduating from Connecticut College in 1949, Parsons initially studied law and then worked as a singer with a band before settling on an acting career in the early 1950s. Moving to New York, she worked as a writer, producer and commentator for The Today Show. She began performing Off-Broadway in 1961, and received a Theatre World Award in 1963 for her performance in Whisper into My Good Ear/Mrs. Dally Has a Lover (1962).

Parsons has received Tony Award nominations for her work in The Seven Descents of Myrtle (1968), And Miss Reardon Drinks a Little (1971), Miss Margarida`s Way (1978) and Morning`s at Seven (2002). She played the Widow Begbick in the American premiere of the Weill – Brecht opera Rise and Fall of the City of Mahagonny (1970), and performed as Mrs. Peacham to Lotte Lenya`s Jenny in Threepenny Opera on tour and in New York City. She also played "Ruth" in Gilbert & Sullivan`s The Pirates of Penzance on Broadway in 1981, and as of July 2008, is playing the role of "Violet Weston" in August: Osage County by Tracy Letts. As a director, Parsons has a number of Broadway credits, including a production of Romeo and Juliet, Macbeth and As You Like It in 1986. Off-Broadway, she directed Dario Fo`s Orgasmo Adulto Escapes From the Zoo (1983). She also served as the Artistic Director of the Actors Studio for five years, ending in 2003.

Her film career includes an Oscar for Best Supporting Actress for her portrayal of Blanche Barrow in Bonnie and Clyde (1967), and a nomination for Rachel, Rachel (1968). She also received a BAFTA Award nomination for her role in Watermelon Man (1970), and appeared in I Never Sang for My Father (1971), A Memory of Two Mondays (1974), For Pete`s Sake (1975), Dick Tracy (1990) and Boys on the Side (1995). She was also the original choice to play the part of Pamela Voorhees in the 1980 film Friday the 13th (the part later went to Betsy Palmer). On television, Parsons played the part of Roseanne Barr`s and Laurie Metcalf`s pretentious mother, Beverly, on the long-running sitcom, Roseanne. Her other television credits include appearances on The Patty Duke Show, Frasier, Law & Order: Special Victims Unit, All In The Family, and Archie Bunker`s Place. In 2004, Parsons was inducted into the American Theatre Hall of Fame.

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