Muti was born in Rome to a Neapolitan journalist father and Ilse Renate Krause, a Baltic German sculptor from Estonia. Her maternal grandparents emigrated from Leningrad (now Saint Petersburg, Russia) to Estonia.
Muti modeled as a teenager and made her film debut in the 1970 film La moglie più bella (The Most Beautiful Wife). She has primarily worked in Italian films but made her English-speaking film debut as Princess Aura in Flash Gordon in 1980. American movies she appeared in include Love and Money (1982), Casanova (1987), Wait Until Spring, Bandini (1989), A Season of Giants (1990), Oscar (1991), Once Upon a Crime (1992), Somewhere in the City (1998) and To Rome with Love (2012). In 2008, Muti introduced her own line of jewelry and subsequently opened shops in Paris, Milan, Rome, Riga, Moscow and Almaty. In 1999 she insured her breasts for $350,000. In 2015, the Italian court of Pordenone condemned her to 8 months in prison for having canceled a theatrical performance following a health problem, which did not prevent her from participating in a social dinner with Vladimir Putin in Saint Petersburg in December 2010. She avoided prison by paying the sum of 30,000 euros to the Verdi theater as compensation.