Dirce was born into a noble family of Thebes, though her parentage is variously reported. Some said she was the daughter of Acheloos, the river god whose waters ran through western Greece, or of Helios, the sun god. Others made her a daughter of the Theban nobility with no divine blood. What mattered was her marriage to Lycus, the king of Thebes who had seized the throne after the death of his brother Nycteus. Lycus had been married to Antiope, the daughter of Nycteus, but he abandoned her and took Dirce as his new wife. The reasons for the abandonment vary in the sources. Some say Antiope had fled to Mount Cithaeron after discovering that she was pregnant by Zeus, the king of the gods who had come to her in the form of a satyr. Others say Lycus simply preferred Dirce and cast Antiope aside. Whatever the cause, Dirce became queen of Thebes, and Antiope became her prisoner.

The cruelty of Dirce towards Antiope became legendary. She confined the former queen in her own house, treated her as a slave, and forced her to perform the most menial tasks. She mocked her for the twins she had borne in secret, Amphion and Zethus, who had been exposed on Mount Cithaeron and raised by shepherds. Dirce knew nothing of the boys' divine parentage or their survival. She simply enjoyed the power of humiliating the woman who had once been queen. Some versions of the myth say that Dirce went further, ordering that Antiope be dragged by a bull as punishment for some imagined offence, though this detail may be a foreshadowing of her own fate rather than a historical fact.

The twins grew to manhood unaware of their royal birth. Amphion was a musician of extraordinary talent, taught by Hermes, the messenger god who moved between heaven and earth with winged sandals and a caduceus, to play the lyre so beautifully that stones moved of their own accord to form walls. Zethus was a man of brute strength, a herdsman and hunter who knew nothing of music but could lift weights that would break ordinary men. When they learned the truth of their birth from a shepherd who had known their mother, they marched on Thebes to claim their inheritance.

Lycus, their father, was killed, or in some versions surrendered the throne willingly. But Dirce was not forgiven. The twins found her and, remembering what she had done to their mother, devised a punishment that matched her cruelty. They tied her to the horns of a wild bull, or in some accounts to the bull itself with ropes around her body, and released the beast upon the rocky slopes of Mount Cithaeron. The bull charged, dragged her across the stones, and tore her body apart. Her blood stained the rocks, and her screams echoed through the mountains. When she was dead, the twins threw her body into a spring near Thebes, and from that day forward the spring bore her name.

The spring of Dirce became one of the most famous landmarks of Thebes. It flowed through the city, providing water for its inhabitants and serving as a place of ritual purification. Pausanias, the Greek traveller who walked through Greece in the 2nd century CE, reported that the spring was still flowing in his day and that the Thebans still pointed out the spot where Dirce's body had been thrown. The spring was also sacred to Dionysus, the god of wine and ecstasy, whose cult was centred at Thebes. In Euripides' tragedy The Bacchae, the chorus of Maenads calls upon the waters of Dirce to welcome the god, and the spring became associated with the frenzied worship that Dionysus inspired. Some said that Dirce herself had been transformed into a nymph after her death, and that her spirit dwelt in the spring, a cruel woman redeemed by the waters that bore her name.

The myth of Dirce was a favourite subject in Greek and Roman art. Painters depicted her tied to the bull, her body twisting in agony, while Amphion and Zethus looked on with grim satisfaction. The scene was carved into sarcophagi, painted on vases, and described in poetry. In the Renaissance, the myth was revived by artists who saw in it a moral tale about the punishment of cruelty and the triumph of justice. But the ancient Greeks did not see it so simply. Dirce was a warning, not a lesson. She was the stepmother who had gone too far, the queen who had forgotten that the children she tormented might one day grow strong enough to return her cruelty with interest.