Born in Chicago, Unger studied painting before switching to design at Parsons, then worked as one of three apprentices for Geoffrey Beene. In 1972 she co-founded The Gillian Group, which grew into one of America's largest women's-apparel suppliers, before she founded Phoebe Company and established her own label.
The house later launched Phoebe Couture, eyewear and boutiques in China, with dresses, suits and eyewear sold in more than 24 countries. After leaving the company she founded Kay Unger Design, spanning clothing, shoes and home. She is an active member of the CFDA.