Dolman was born in Toronto. Her brother is director Bob Dolman. Dolman performed in the Canadian Rock Theatre production of Jesus Christ Superstar in the early 1970s, which travelled to Las Vegas and Los Angeles, and recorded an album with the group at MGM while they were in Los Angeles.
In 1980, she married fellow Canadian actor Martin Short, whom she had met during the run of the 1972 Toronto production of Godspell. Dolman was Gilda Radner's understudy. Dolman attended high school at York Mills Collegiate Institute in Toronto, and held a bachelor's degree in philosophy from the University of Western Ontario.
Dolman retired from show business in 1985 to be a homemaker and full-time mother to her children. A profile of the couple appeared in the February 1987 issue of Vogue. The family made their home in Pacific Palisades, California. Dolman and Short also kept a vacation home on Lake Rosseau, Ontario.
Dolman suffered from ovarian cancer and died on August 21, 2010, in Pacific Palisades, California, at the age of 58.
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