Henley attended Murrah High School in Jackson, followed by Southern Methodist University, where she was a member of the acting ensemble.
[2] From 1975 to 1976, she taught playwriting at the University of Illinois (Urbana) and the Dallas Minority Repertory Theater.
[1] In 1976 Henley moved to Los Angeles and began work on her play Crimes of the Heart.
[1] For many years, Henley dated actor, writer and director Stephen Tobolowsky, whom she met while they were students at Southern Methodist University.
Her play Family Week was produced at MCC Theater, New York City in 2010, directed by Jonathan Demme.
[10] Her plays written in the 1980s have been characterized as naturalistic portrayals of the relationship between the inner self and the world,[11] and her characters often are outsiders and nonconformists unable to share their feelings and experiences.