Drum magazine picked her to feature on its front cover in 1957. But when the German photographer Jurgen Schadeberg took Rathebe to a mine dump for the shoot, they were arrested for contravening the Immorality Act, which forbade interracial relationships.
Rathebe later became a lead singer with two popular township bands, the Harlem Swingsters and the Inkspots. Such was her beauty that it was said that when men greeted one another, and wanted to stress that all was well, they would say, "It is Dolly."
Rathebe was born Josephine Kedibone in Randfontein, near Johannesburg. Her father was a migrant labourer and her mother came from a farming family. She attended St Cyrian missionary school in Sophiatown, the only area of Johannesburg where blacks could own freehold property - and a place where whites could go, even though it was against the law, to drink, listen to music and discuss issues with blacks and Indians.
This experience had a lasting impression on Rathebe, who never found it difficult to mingle with people across racial divides.
Her father, whom she described as the best man she ever met, was often away working in the gold mines, and this led to the breakdown of her parents' marriage. At 15, she became the family breadwinner. She then began a singing career - which led to her auditioning for Jim Comes To Jo'burg.
Rathebe, by now the first African female star, fell in love with William Buti Nketle, a notorious Sophiatown gangleader. She soon became a gangster's moll, often at the forefront of battles against rival gangs.
With leading roles in Alf Herbert's African Jazz and Variety Show and in Gibson Kente's Sikalo, Rathebe's career continued to blossom, and she became a mentor to up-and-coming artists such as Miriam Makeba, Thandi Klaasen, Dorothy Masuka and Sophie Mgcina.
But while other musicians left for exile, Rathebe stayed behind and endured apartheid.
Her beloved Sophiatown was finally destroyed in the early 1960s. Rathebe, now the lead singer in the Afro-Jazz group the Elite Swingsters, found it increasingly difficult to perform, especially after an curfew was imposed. She later moved her family to Cape Town, where she ran a shebeen for many years.
The birth of democracy in South Africa brought Rathebe back to the spotlight. She rejoined the Elite Swingsters and performed at the inauguration of Nelson Mandela as South Africa's first black president.
In 1994, she sang at Westminster Abbey in London, in a ceremony to mark South Africa's return to the Commonwealth.
She performed in television shows and films, both in and outside South Africa. She also had a role alongside the American actor James Earl Jones in the film Cry, The Beloved Country.
In 2003, she was honoured with a series of concerts organised by Miriam Makeba. She used some of the proceeds to build a community hall for the elderly, and was involved in other humanitarian projects.
Before her death, she was nominated for the Order of Ikhamanga, awarded to South Africans who have excelled in their fields.
She was married twice, and is survived by two daughters and a son.
Josephine 'Dolly' Rathebe, singer, born April 2 1928; died September 16 2004