Oswalda trained as a ballerina and became a dancer for a theater in Berlin as a teenager, working in chorus lines.

[3] She made her film debut in Richard Oswald's Nächte des Grauens (A Night of Horror) before being discovered by the actor and screenwriter Hanns Kräly, who in turn recommended her to director Ernst Lubitsch.

[3] During her early career, she starred in several films by Lubitsch, including The Merry Jail, I Don't Want to Be a Man, The Oyster Princess and The Doll.

[2] In 1921, Oswalda started her own film production company with her husband at the time, the Hungarian Baron Gustav Wilhelm Viktor Freiherr von Koczian-Miskolczy.

In the late 1930s, Oswalda fled Nazi Germany to live in Prague with her partner, former producer Julius Außenberg.