Karle was born Isabella Lugoski in Detroit, Michigan, the daughter of Polish immigrants; her father was a house painter and her mother a seamstress. She first heard English spoken only when she began school. She was educated at the University of Michigan, where she obtained her PhD in 1943. Here she met Jerome Karle, a physicist who would win the 1985 Nobel Prize for chemistry for work in x-ray crystallography. They married in 1942 and worked together during the war on the Manhattan Project in Chicago. After the war they moved in 1946 to the Naval Research Laboratory in Washington D.C.

With over 200 papers to her credit Karle made a number of major contributions to the development of x-ray crystallography. In the 1950s, Jerome Karle and Herb Hauptman had developed new and powerful techniques to enable the phase of diffracted x-rays to be calculated directly. Isabella Karle was one of the first to deploy the new method successfully, and thereby to draw the attention of other workers to its potential.

In her first major success in 1969 she established the structure of venom extracted from South American frogs. This was followed in 1975 with the structure of valinomycin, a polypeptide that transports potassium ions across biological membranes. At the time it was the largest molecule to be worked out directly. In 1979 the structure of another peptide, antamanide, was solved. She also determined the structure of the natural opiate, enkephalin.