Lilly Steiner was born in Vienna, Austria as Lilly Hofmann on 7 April 1884. Following her artistic education, that she received from Ludwig Michalek at the school of arts for women and girls in Vienna, she married the manufacturer Hugo Steiner in 1904. He was a fellow student of Karl Kraus and from 1903 he worked with architect Adolf Loos, who designed the Steiners' home in 1910, perhaps his most famous structure. Not only the house became a highly influential example of modern architecture, but it also played an important role in establishing the reputation of Loos as a bold modern architect inside and outside Vienna. In 1918 artist Egon Schiele did a number of charcoal portraits of her. The Steiners lost their fortune in the financial crisis in 1926 and had to leave Vienna.

As an artist, Lilly first appeared before the public in 1917. She was a member of the Hagenbund, which was founded in 1899, and was a founding member of the Print Club of Viennese artists. In 1927 the Steiners moved to Paris where Hugo became office manager of a Knize clothiers branch. In Paris her work received the acceptance that had eluded her in Austria.

An important place among her oeuvre were portraits of women and children as well as the subject of motherhood. After 1937 she dealt with political ongoings, responding to Hitler's 1938 march into her native Vienna with a painting she titled "Baroque Composition", depicting a shattering of the Baroque world, uncertain under a threatening storm. Steiner created various illustrations, of which her expressive studies of conductors and artists such as Alban Berg, Arturo Toscanini and Artistide Maillol must be highlighted. As for her graphic works, the lithographs for Arnold Schönberg’s “Gurrelieder” and those dealing with the motherhood subject are especially well-known.

Lilly Steiner died on 3 October 1961 in Paris.