She was born in Brooklyn, New York on October 23, 1896. Lilyan was the youngest of eight children and her Jewish father worked as a clothing manufacturer. When she was a teenager she started modeling and performing in vaudeville. In 1914 she married fellow vaudeville entertainer Al Lee but they separated a few years later. She spent three seasons with the Ziegfeld Follies and starred in the play The Gold Diggers. Lilyan made her film debut in the 1921 silent drama Experience. The she costarred with Mabel Normand in Head Over Heels and with Gloria Swanson in Manhandled. Sadly she struggled with her weight and was secretly suffering from bulimia. In 1925 she appeared in ten films including Pretty Ladies, Seven Days, and Bright Lights. The sultry blonde became a popular actress but she found herself typecast as a villain.
Lilyan, who was a lesbian, enjoyed passionate affairs with Tallulah Bankhead and Gertrude Lawrence. She fell madly in love with actress Greta Garbo and was heartbroken when she got dumped. Her best friend was actor Edmund Lowe who was also gay. The couple decided to get married in 1925 and enjoyed one of Hollywood's happiest lavender marriages. They lived in a beautiful mansion called "Lilowe" that she decorated herself. Lilyan had the dining room painted dark blue to contrast her blonde hair. She and Edmund became known for throwing wild parties that often turned into drunken orgies. Her lavish wardrobe cost more than one million dollars and she was often called "the best dressed woman on the screen". Unfortunately she also became known for her violent temper.
In 1931 she beat up June Marlowe after finding the actress in her husband's dressing room. Then she got into a fist fight with Lupe Velez. She easily made the transition to sound pictures and signed a signed a lucrative contract with Paramount. Lilyan got rave reviews for her comedic roles in The Wiser Sex and Girls About Town. Then in 1932 she was diagnosed with abdominal cancer. She continued to make movies as her condition worsened. Her role in the 1934 drama Riptide had to be shortened because she was too sick to work. Tragically on March 21, 1934 she died from complications due to cancer. Lilyan was only thirty-seven years old. She was buried at Washington Cemetery in Brooklyn, New York. Dozens of celebrities attended her funeral and her devoted fans nearly caused a riot. Her final film Frankie and Johnny was released two years after her death.