Chihuly studied interior design at the University of Washington in Seattle (B.A., 1965) and received an M.S. in sculpture from the University of Wisconsin, where he studied under Harvey Littleton. In 1968 he received an M.F.A. in ceramics from the Rhode Island School of Design (RISD). That same year he traveled to Italy on a Fulbright fellowship and a Louis Comfort Tiffany Foundation grant and worked at Venini Fabrica, the renowned glassblowing workshop in Murano, an island in the Venice Lagoon. Returning to the United States in 1969, he established the RISD (Rhode Island School of Design) glassblowing program and founded (1971) the influential Pilchuck Glass School north of Seattle. There he created the first of a number of environmental installations—a group of clear glass bulbs floating on Pilchuck Pond. He continued to teach at RISD until 1980.

In 1976 an automobile accident left Chihuly blind in one eye, and thereafter he was dependent on assistant gaffers (glassblowers) to execute his distinctive designs. Chihuly's works in glass both echo and extend glass's historical relationship with functionality. Vase, basket, bowl, and other vessel forms dominate many of his individual pieces, though they are enlivened with rhythmic tempos and curvaceous motifs far removed from domestic use. In 1996 he completed Chihuly over Venice, a collaborative international undertaking involving glassblowers from Finland, Ireland, and Mexico. That project included Chandeliers (an enduring theme), which were installed around the city and lit by natural light, and numerous other glass forms that were released to float freely along the Venetian canals. In 2002 his Chihuly Bridge of Glass accompanied the opening of the Museum of Glass in his native Tacoma, Wash.

Chihuly's vibrantly coloured, organic glass creations were immediately recognizable. His technical innovations enabled the production of a tremendous range of patterns, colours, and textures. Among his several extended series were Blankets (for which he used cylindrical forms covered with patterns derived from Native American blankets), Seaforms (shapes evoking sea urchins, shells, and other marine life), and Chandeliers (large-scale hanging sculptures illuminated by natural light sources). Variations in scale made it possible for onlookers to experience his pieces as intimate, personal objects or to be completely immersed in them, as in his prismatic interior installations in a variety of public spaces. Notable among the latter were Chihuly's ceiling sculpture (made of more than 2,000 hand-blown floral shapes) in the lobby of the Bellagio Resort in Las Vegas and the Light of Jerusalem project (1999–2000), a large-scale exhibition in the courtyard of the Tower of David Museum that dramatically juxtaposed more than a dozen of Chihuly's glass installations with the timeworn, rough-textured stone of the ancient site.