Born in a log cabin in Arkansas, Pfost was five years old when her parents moved to a farm near Boise, Idaho in 1911. She quit Meridian High School at 16 and worked as a milk analyist at a dairy in Nampa. The next year she married her supervisor, Jack Pfost, and the two would go on to run a real estate business in the 1940s and 1950s. Gracie graduated from Link's Business College in Boise in 1929.

Pfost entered politics in Canyon County, where she held several positions in county government between 1929 and 1951 including deputy county clerk, auditor, recorder of deeds, and county treasurer. She also served as an Idaho delegate to all Democratic National Conventions between 1944 and 1960.

Gracie first ran for congress in 1950, but lost to the Republican candidate. She successfully ran in 1952 and was re-elected in 1954, 1956, 1958, and 1960. Nicknamed the "Hell's Belle" of Congress for fighting for a large federal dam on the Snake River in Hells Canyon. Pfost attempted to run for Henry Dworshak's Senate seat in 1962, but was narrowly defeated by the Republican candidate.

After leaving the House in 1963, Pfost remained in Washington, D.C. and worked for the Federal Housing Administration as a special assistant on housing for the elderly. Gracie fell ill in Washington, and was eventually diagnosed with Hodgkin's disease.