Dorothy Burr Thompson was born into a prominent Philadelphia family. She studied the classics early in life at Miss Hill's School in Center City, PA and The Latin School in Philadelphia, beginning Latin at age 9 and ancient Greek at age 12. At 13, she went on a Grand Tour of Europe, visiting museums and monuments. She graduated summa cum laude from Bryn Mawr College in 1923, the first graduate with a major in classical archaeology and Greek, and was awarded the college's European Fellowship. She used it to study at the American School of Classical Studies at Athens and then worked on excavations at Eutresis and Phlius under the direction of Hetty Goldman.
In 1925, she discovered a tomb that proved to be the burial place of the king and queen of Midea. She completed her Ph.D. at Bryn Mawr in 1931 with a dissertation on Hellenistic terracotta figurines, which became her specialty. The following year, she joined the faculty of the American School of Classical Studies and was appointed the first female Fellow of the Athenian agora excavations. The dig's assistant director of field work was Homer Thompson, a Canadian archaeologist; the two were married in 1934. Working together, they made several important discoveries, including the garden site of the Temple of Hephaistos. Inspired by her love of gardening, she reconstructed all 20 acres of the ancient garden and planted olive, laurel, oleander, and poplar trees. She served as acting director of the Royal Ontario Museum until following her husband to Princeton, New Jersey, when he moved to the Institute for Advanced Study. In 1987, she was awarded the Gold Medal for Distinguished Achievement by the Archaeological Institute of America. She published more than 50 scholarly papers and books on her excavation work, including An Ancient Shopping Center: The Athenian Agora (1971).