Franziska Gaál was born as Franciska Zilverstrich (according to some other sources Zilveritch, Silberstein or Silberspitz) in Budapest. As the youngest of 13 children of an affluent Jewish middle-class family, she started her career at a very early age.

Gaál was already a highly successful stage actress, when producer Joe Pasternak discovered her for Universal's European subsidiary "Deutsche Universal". Starting with "Paprika", she went on to star in several features which highlighted her comic timing as well as her enchanting looks.

After the Nazis' raise to power, Gaal couldn't continue her work in Germany. Between 1934 and 1936, she became the star of several independently produced films in Austria. Produced by Pasternak, directed by Hermann Kosterlitz and written by Felix Joachimson, "Peter"(1934), "Kleine Mutti" (1935) and "Katharina – die Letzte" (1936) were modern and witty screwball comedies which marked the height of Gaal's career.

In 1937, Gaal and the rest of the Universal-team left Austria and emigrated to the US. In Hollywood, Gaal wasn't able to find suitable roles, and she returned to Hungary in 1940. She survived the war and Nazi prosecution hidden in a bombed-out estate, and after a failed comeback in Budapest, she returned to the US in 1947.

Apart from minor theatre roles in the early 50s, she didn't surface again as an actress. Little is known about her life in New York, and on August 13th 1972, the former star of German sound comedy died impoverished and unnoticed by the public.