Born in Lucerne, Switzerland, she was a daughter of Harry Hays Morgan, an American diplomat who was U.S. consul in Buenos Aires and in Brussels, and his half-Chilean, half-American wife, Laura Delphine Kilpatrick. Her maternal grandfather was a Union general, Hugh Judson Kilpatrick (1836-1881), who was also U.S. minister to Chile, and through her maternal grandmother, she reportedly was a descendant of Spain's royal house of Navarre. Thelma Morgan had two sisters: Gloria Morgan (her identical twin and the mother of Gloria Vanderbilt, the fashion designer and artist) and Consuelo Morgan, who was married to Count de Maupas, a French nobleman who actually wasn't a count at all; to Benjamin Thaw, Jr of Pittsburgh; and to Alfons B. Landa, president of Colonial Airlines and vice-chairman of the finance committee of the Democratic National Committee in 1948. She also had a brother, Harry Hays Morgan, Jr, who became a very minor Hollywood actor in such films as "Abie's Irish Rose" (1946), "Joan of Arc" (1948), and others.
Her first husband was James Vail Converse, a grandson of Theodore N. Vail, former president of the American Telephone and Telegraph Company (AT&T). They were married in Washington, D.C., on Feb. 16, 1922 -- the bride was 16 years old, the divorcé groom was about a decade older -- and they divorced in Los Angeles, California, on April 10, 1925. After the divorce, she was rumored to be engaged to the American actor Richard Bennett, the matinée-idol father of Hollywood film stars Constance Bennett, Joan Bennett, and Barbara Bennett (the third was the mother of talk-show host Morton Downey, Jr).
Her second husband was Marmaduke Furness (1883-1940), 1st Viscount Furness, the chairman of Furness Shipping Company. They were married on June 27, 1926 and divorced in 1933. They had one son, Anthony William Furness, 2nd Viscount Furness.
She briefly was a motion picture producer and actress after founding Thelma Morgan Pictures at the age of 17. Her first starring role, in 1923, was the lead in a film produced by her own company, "Aphrodite," which was filmed at Vitagraph Studios. She described her leading role to The New York Times as that of "an American girl, brought up under the sinister influence of an old Egyptian woman." She also had a small part in the film "Enemies of Women" (1923), a William Randolph Hearst production whose cast included Lionel Barrymore and Clara Bow.
She and her sister Gloria wrote a memoir called "Double Exposure."