Charlotte Perkins grew up in poverty, her father having essentially abandoned the family. Her education was irregular and limited, but she did attend the Rhode Island School of Design for a time. In May 1884 she married Charles W. Stetson, an artist. She soon proved to be totally unsuited to the domestic routine of marriage, and after a year or so she was suffering from melancholia, which eventuated in complete nervous collapse. A California trip in 1885 was helpful, however, and in 1888 she moved with her young daughter to Pasadena. She divorced her husband in 1894, and, after his remarriage shortly thereafter to one of her close friends, she sent her daughter to live with them. The entire affair was the subject of scandalized public comment.

After her move to California, Perkins began writing poems and stories for various periodicals. Among her stories, "The Yellow Wall-Paper," published in The New England Magazine in January 1892, was exceptional for its starkly realistic first-person portrayal of the mental breakdown of a physically pampered but emotionally starved young wife. In 1893 she published In This Our World, a volume of verse. For a time in 1894, after her move to San Francisco, she edited with Helen Campbell the Impress, organ of the Pacific Coast Woman's Press Association. She also became a noted lecturer during the early 1890s on such social topics as labour, ethics, and woman's place, and, after a short period of residence at Jane Addams's Hull House in Chicago in 1895, she spent the next five years in national lecture tours. In 1896 she was a delegate to the International Socialist and Labor Congress in London, where she met George Bernard Shaw, Beatrice and Sidney Webb, and other leading socialists.

In 1898 Perkins published Women and Economics, a manifesto that attracted great attention and was translated into seven languages. In a radical call for economic independence for women, she dissected with keen intelligence much of the romanticized convention surrounding contemporary ideas of womanhood and motherhood. Her notions of redefining domestic and child-care chores as social responsibilities to be centralized in the hands of those particularly suited and trained for them reflected her earlier interest in the Nationalist clubs advocated by Edward Bellamy (Bellamy, Edward), and she expanded on contemporary ideas in Concerning Children (1900) and The Home (1903). In June 1900 she married a cousin, George H. Gilman, with whom she lived in New York City until 1922. Human Work (1904) continued the arguments of Women and Economics. Later books include What Diantha Did (1910), The Man-Made World (1911), in which she distinguished the characteristic virtues and vices of men and women and attributed the ills of the world to the dominance of men, The Crux (1911), Moving the Mountain (1911), His Religion and Hers (1923), and The Living of Charlotte Perkins Gilman: An Autobiography (1935).

From 1909 to 1916 Gilman edited and published the monthly Forerunner, a magazine of feminist articles, views, and fiction. She also contributed to other periodicals. Gilman joined Jane Addams in founding the Woman's Peace Party in 1915, but she was little involved in other organized movements of the day. After treatments for the cancer that afflicted her proved ineffective, she took her own life.