After receiving a rabbinical education, Hillman worked in a chemical laboratory in Kovno (now Kaunas), Lithuania, now Lithuanian S.S.R. On his release from imprisonment by the tsarist government for advocating labour reforms, he went to England and then, in 1907, to the United States. Employed in a men's clothing factory in Chicago from 1909, he led a garment workers' strike there the following year. Subsequently he moved to New York City, where he was elected president of the Amalgamated Clothing Workers. Under his leadership the union greatly increased its membership; it secured unemployment insurance, provided a housing development for its members, and organized two banks, which, during the Great Depression, preserved several garment businesses by granting loans to the firms or by buying their stock.

During the presidency of Franklin D. Roosevelt (1933–45), Hillman served in the National Recovery Administration, the Office of Production Management, and the War Production Board's labour division. In 1943 he became chairman of the Political Action Committee of the CIO, which was prominent in the election campaign of 1944. After World War II he was vice president of the World Federation of Trade Unions.