Born in Montana, Lily Gladstone's mother was an early childhood education specialist and her father a broadcast journalist. She has "tribal affiliations, on her father's side, that include Kainai, Amskapi Piikani (aka the Blackfeet Tribe) and Nimi'ipuu First Nations". Her maternal great, great grandfather was first cousin to the British prime minister William Gladstone (from 1868-1894, while on her father's side, her great, great grandfather was the treaty chief, Red Crow. Gladstone was raised in Browning, Montana, on the Blackfeet Indian Reservation until she was 11, after which time her family moved to Seattle for economic reasons. She graduated, with high honors, from the University of Montana in 2008 with a B.F.A. in Acting/Directing and a minor in Native American Studies.
Gladstone's breakout role came in 2016 from Kelly Reichardt's Certain Women where she played a lonely, unnamed rancher who falls for a teacher at a local night school. Her poignant, thoughtful performance earned her the Los Angeles Film Critics Association Award for Best Supporting Actress and Boston Society of Film Critics Award for Best Supporting Actress, as well as nominations for the Independent Spirit Award for Best Supporting Female and Gotham Independent Film Award for Breakthrough Actor.
In 2017 Gladstone joined the Oregon Shakespeare Festival acting company and in 2020 she stared in the Yale Repertory Theater production of Mary Kathryn Nagle's Manhattan.
In 2019 Gladstone played the Chief Factor's wife in the American drama film First Cow, also directed by Kelly Reichardt. The film won Best Film at the 2020 New York Film Critics Circle Awards, and was named one of the ten best films of 2020 by the National Board of Review. 2019-2020 she played Roxanne on the television drama series Billions.