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Muir was born in Andes, New York and began modeling in New York City while still a high school student. She soon won a role in a show called Greenwich Village Follies. She participated in the Earl Carroll Vanities and in the International Review. The latter show starred Gertrude Lawrence. Her major break as a theatrical performer came when she landed the title role in My Girl Friday!, in 1929. While in London, England performing in a musical Esther became a favorite dancing partner of Edward VIII, then Prince of Wales. She befriended Wallis Warfield.

She was introduced by columnist Walter Winchell to Hollywood director and choreographer Busby Berkeley, whom she married. They were divorced in 1931. In 1936 Muir toured with the Marx Brothers in a stage production of A Day at the Races (1937). The brothers searched for material for the film version while they traveled.

Muir described the Marx Brothers as diligent comic actors who sometimes worked days and weeks on a scene to perfect it. Her other screen credits include parts in I`ll Take Romance (1937), City Girl (1938), and The Girl and the Gambler (1939). She continued in motion pictures until 1942. Her final role is Bonnie in X Marks The Spot. Her first motion picture appearance was in A Dangerous Affair in 1931.

In the 1950s the former actress became a real estate developer in Southern California. She supervised the construction of more than 400 tract homes. Muir married composer/producer Sam Coslow in Mexicali, Mexico on November 1, 1934. They repeated their wedding vows a year later in Ventura, California. The marriage ended in divorce in 1948. Her daughter, Jacqueline Coslow, became an actress and lived in New York City.

Esther Muir died in 1995 at Northern Westchester Hospital in Mount Kisco, New York. She was 92. She lived in Somers, New York.