Miranda was born Maria do Carmo Miranda da Cunha in Varzea da Ovelha e Aliviada, a village in the northern Portuguese municipality of Marco de Canaveses. She was the second daughter of Jose Maria Pinto da Cunha (17 February 1887 - 21 June 1938) and Maria Emilia Miranda (10 March 1886, Rio de Janeiro - 9 November 1971). In 1909, when Miranda was ten months old, her father emigrated to Brazil and settled in Rio de Janeiro, where he opened a barber shop.

Desiring creative freedom, Miranda decided to produce her own film in 1947 and played opposite Groucho Marx in Copacabana. The film's budget was divided into about ten investors' shares. A Texan investor who owned one of the shares sent his brother, David Sebastian (23 November 1907 - 11 September 1990), to keep an eye on Miranda and his interests on the set. Sebastian befriended her, and they began dating.  Miranda and Sebastian married on 17 March 1947 at the Church of the Good Shepherd in Beverly Hills, with Patrick J. Concannon officiating. In 1948 Miranda became pregnant, but miscarried after a show. Although the marriage was brief, Miranda (who was Catholic) did not want a divorce. Her sister, Aurora, said in the documentary Bananas is My Business: "He married her for selfish reasons; she got very sick after she married and lived with a lot of depression". The couple announced their separation in September 1949, but reconciled several months later.  Miranda was discreet, and little is known about her private life. Before she left for the U.S., she had relationships with Mario Cunha, Carlos da Rocha Faria (son of a traditional family in Rio de Janeiro) and Aloysio de Oliveira, a member of the Bando da Lua. In the U.S., Miranda maintained relationships with John Payne, Arturo de Cordova, Dana Andrews, Harold Young, John Wayne, Donald Buka and Carlos Niemeyer. During her later years, in addition to heavy smoking and alcohol consumption, she began taking amphetamines and barbiturates and they took a toll on her health.

Was Miranda married
Miranda and Sebastian married on 17 March 1947 at the Church of the Good Shepherd in Beverly Hills,