Castle was discovered by a talent scout while eating in a restaurant in Beverly Hills. She was signed to a seven-year contract with Universal-International and made her film debut in the 1947 film When a Girl's Beautiful. In 1949, she was named "Miss Cheesecake" by the Southern California Restaurant Association. Later that year, the Junior Chamber of Commerce named Castle "Miss Three Alarm". She later appeared in such films as Payment on Demand (1951), The Prince Who Was a Thief (1951) Invasion U.S.A. (1952), 99 River Street (1953), and Arrivederci Roma (1957).
In the 1950s, Castle moved into television. She appeared in multiple guest roles on Fireside Theater, Cheyenne, 77 Sunset Strip, and The Restless Gun. In 1957 she played defendant Sally Fenner in the Perry Mason episode, "The Case of the Negligent Nymph."
Castle was married four times. Her first marriage was to Revis Call. They married in 1945 and divorced in 1950. She married Universal publicist Robert H. Raines January 4, 1951. They divorced April 29, 1954. Her third marriage was to producer/director william McGarry in 1955. They had a daughter, Erin, before divorcing in 1969. Castle's fourth and final marriage was to Arthur Morganstern in 1971. They remained married until Morganstern's death in April 1973.
From 1959 to 1962, she co-starred in the television western series Lawman — her first continuing series. Her role as saloon owner Lily Merrill brought out a new dimension of Castle's talent. She stated "For the first time in my life I'm a singer — that's the producer's opinion, not mine."
For her contribution to the television industry, Peggie Castle has a star on the Hollywood Walk of Fame at 6230 Hollywood Boulevard. It was dedicated February 8, 1960. (This source lists the address as 6266 Hollywood Boulevard.)
Her final onscreen role was a guest appearance in a 1966 episode of The Virginian.
In her later years, Castle developed alcoholism. On August 11, 1973, her third husband, william McGarry found her body on the couch of her Hollywood apartment. Her death was later determined to be caused by cirrhosis.
