Gabriel Lippmann was born in Bonnevoie, Luxembourg (Luxembourgish: Bouneweg), on 16 August 1845. At the time, Bonnevoie was part of the commune of Hollerich (Luxembourgish: Hollerech) which is often given as his place of birth. (Both places, Bonnevoie and Hollerich, are now districts of Luxembourg City.) His father, Isaïe, a French Jew born in Ennery near Metz, managed the family glove-making Business at the former convent in Bonnevoie. In 1848, the family moved to Paris where Lippmann was initially tutored by his mother, Miriam Rose (Lévy), before attending the Lycée Napoléon (now Lycée Henri-IV). He was said to have been a rather inattentive but thoughtful pupil with a special interest in mathematics. In 1868, he was admitted to the École normale supérieure in Paris where he failed the agrégation examination which would have enabled him to enter the teaching profession, preferring instead to study physics. In 1872, the French government sent him on a mission to Heidelberg University where he was able to specialize in electricity with the encouragement of Gustav Kirchhoff, receiving a doctorate with "summa cum laude" distinction in 1874. Lippmann then returned to Paris in 1875, where he continued to study until 1878, when he became professor of physics at the Sorbonne.

Lippmann's PhD thesis, presented to the Sorbonne on 24 July 1875, was on electrocapillarity.

In 1881, Lippmann predicted the converse piezoelectric effect.

One of Lippmann's early discoveries was the relationship between electrical and capillary phenomena which allowed him to develop a sensitive capillary electrometer, subsequently known as the Lippmann electrometer which was used in the first ECG machine. In a paper delivered to the Philosophical Society of Glasgow on 17 January 1883, John G. M'Kendrick described the apparatus as follows:

Lippmann was a member of the Academy of Sciences from 8 February 1886 until his death, serving as its President in 1912. In addition, he was a Foreign Member of the Royal Society of London, a member of the Bureau des Longitudes, and a member of the Grand Ducal Institute of Luxembourg. He became a member of the Société française de photographie in 1892 and its President from 1896 to 1899. Lippmann was one of the founders of the Institut d'optique théorique et appliquée in France. Lippmann was the President of the Société Astronomique de France (SAF), the French astronomical society, from 1903-1904.

In 1886, Lippmann's interest turned to a method of fixing the colours of the solar spectrum on a photographic plate. On 2 February 1891, he announced to the Academy of Sciences: "I have succeeded in obtaining the image of the spectrum with its colours on a photographic plate whereby the image remains fixed and can remain in daylight without deterioration." By April 1892, he was able to report that he had succeeded in producing colour images of a stained glass window, a group of flags, a bowl of oranges topped by a red poppy and a multicoloured parrot. He presented his theory of colour photography using the interference method in two papers to the Academy, one in 1894, the other in 1906.

In 1895, Lippmann evolved a method of eliminating the personal equation in measurements of time, using photographic registration, and he studied the eradication of irregularities of pendulum clocks, devising a method of comparing the times of oscillation of two pendulums of nearly equal period.

In practice, the Lippmann process was not easy to use. Extremely fine-grained high-resolution photographic emulsions are inherently much less light-sensitive than ordinary emulsions, so long exposure times were required. With a lens of large aperture and a very brightly sunlit subject, a camera exposure of less than one minute was sometimes possible, but exposures measured in minutes were typical. Pure spectral colours reproduced brilliantly, but the ill-defined broad bands of wavelengths reflected by real-world objects could be problematic. The process did not produce colour prints on paper and it proved impossible to make a good duplicate of a Lippmann colour photograph by rephotographing it, so each image was unique. A very shallow-angled prism was usually cemented to the front of the finished plate to deflect unwanted surface reflections, and this made plates of any substantial size impractical. The lighting and viewing arrangement required to see the colours to best effect precluded Casual use. Although the special plates and a plate holder with a built-in mercury reservoir were commercially available for a few years circa 1900, even expert users found consistent good results elusive and the process never graduated from being a scientifically elegant laboratory curiosity. It did, however, stimulate interest in the further development of colour photography.

In 1908, Lippmann introduced integral photography, in which a plane array of closely spaced small lenses is used to photograph a scene, recording images of the scene as it appears from many slightly different horizontal and vertical locations. When the resulting images are rectified and viewed through a similar array of lenses, a single integrated image, composed of small portions of all the images, is seen by each eye. The position of the eye determines which parts of the small images it sees. The effect is that the visual geometry of the original scene is reconstructed, so that the limits of the array seem to be the edges of a window through which the scene appears life-size and in three dimensions, realistically exhibiting parallax and perspective shift with any change in the position of the observer. This principle of using numerous lenses or imaging apertures to record what was later termed a light field underlies the evolving Technology of light-field cameras and microscopes.

Lippmann married the daughter of the Novelist Victor Cherbuliez in 1888. He died on 13 July 1921 aboard the steamer France while en route from Canada.

ln Luxembourg City an Institute for fundamental scientific research was named after Lippmann (Centre de Recherche Public Gabriel Lippmann) which merged on 1 January 2015 with another major research centre to form the new Luxembourg Institute for Science and Technology (LIST).