The daughter of Merv Lilley and Dorothy Hewett (qq.v.), Kate Lilley published her first poem at the age of fifteen. She grew up in Perth, and, when her mother was offered a writing grant, the family moved to Sydney. Lilley graduated with a Bachelor of Arts from the University of Sydney, where she won the Henry Lawson Prize for Poetry in 1982. Lilley also won scholarships and fellowships to London and Oxford Universities, where she wrote a PhD on poetry.
Lilley has been an academic in the English Department at the University of Sydney, and has edited and contributed to a number of works on women's writing. Her research interests include gender, American and African-American poetry, and literary theory.