Lee Yeon-hee signed with SM Entertainment after winning “Best Feature” at the SM Entertainment Best Youth Contest in 2001. She went on to appear in various music videos before officially debuting as an actress in 2004 through the KBS sageuk Emperor of the Sea. In 2005, she became part of the KBS2 series Resurrection, which earned her a Best Young Actress nomination at the KBS Drama Awards. In 2006, she attracted more attention after starring opposite Hyun Bin in the romance film A Millionaire’s First Love. In 2007, she acted alongside Kang Dong-won in the psychological drama Film M, which scored her several Best New Actress nominations. In 2008, she joined the main cast of the big-budget MBC drama East of Eden, which won her Best New Actress at the MBC Drama Awards. In 2014, she was nominated for a Top Excellence Award at the MBC Drama Awards for her work in Miss Korea. In 2017, she took on the female leading role in the SBS fantasy romance Reunited Worlds, which gave her a Top Excellence Award nomination at the SBS Drama Awards.

Lee Yeon-hee attended Chung-Ang University. In June 2020, the actress married her non-celebrity boyfriend, whom she met on a blind date.