Elion was born in New York City on January 23, 1918, to parents Robert Elion, a Lithuanian Jewish immigrant and a dentist, and Bertha Cohen, a Polish immigrant. Her family lost their wealth after the Wall Street Crash of 1929. When she was 15, her grandfather died of cancer, instilling in her a Desire to do all she could to try and cure the disease. She graduated from Hunter College in 1937 with a degree in chemistry and New York University (M.Sc.) in 1941, while working as a high school Teacher during day time. Her fifteen fellowship applications were turned down due to gender bias at the time, so she enrolled in a secretarial school, which lasted six weeks before she found a job.

Soon after graduating from Hunter College, Elion met Leonard Canter, an outstanding statistics student at City College of New York (CCNY). They planned to marry, but Leonard became ill. On June 25, 1941 he died from bacterial endocarditis, an infection of his heart valves.

Unable to obtain a graduate research position, she worked as a food quality supervisor at A&P supermarkets, and for a food lab in New York, testing the acidity of pickles and the color of egg yolk going into mayonnaise. Later, she left to work as an assistant to George H. Hitchings at the Burroughs-Wellcome pharmaceutical company in Tuckahoe, New York (now GlaxoSmithKline). Hitchings was using a new way of developing drugs, by imitating natural compounds instead of through trial and error. He believed that if he could trick cancer cells into accepting artificial compounds for growth, they could be destroyed without also destroying normal cells. She began to work with purines, and in 1950, she developed the anti-cancer drugs tioguanine and 6-MP.

During 1967 she occupied the position of the head of the company's Department of Experimental Therapy and officially retired in 1983. Despite her retirement, Elion continued working almost full-time at the lab, and oversaw the adaptation of azidothymidine (AZT), which became the first drug used for treatment of AIDS.

Awards include the Garvan-Olin Medal (1968), the National Medal of Science (1991), and the Lemelson-MIT Lifetime Achievement Award (1997). In 1991 Elion became the first woman to be inducted into the National Inventors Hall of Fame. In 1992, she was elected to the Engineering and Science Hall of Fame. She was elected a Foreign Member of the Royal Society (ForMemRS) in 1995.

She was affiliated with Duke University as Adjunct Professor of Pharmacology and of Experimental Medicine from 1971 to 1983 and Research Professor from 1983 to 1999.

In 1988 Elion received the Nobel Prize in Physiology or Medicine, together with Hitchings and Sir James Black for discoveries of "important new principles of drug treatment". She was elected a member of the National Academy of Sciences in 1990, a member of the Institute of Medicine in 1991 and a Fellow of the American Academy of Arts and Sciences also in 1991.

She began to go to night school at New York University Tandon School of Engineering (then Brooklyn Polytechnic Institute), but after several years of long range commuting, she was informed that she would no longer be able to continue her doctorate on a part-time basis, but would need to give up her job and go to school full-time. Elion made what was then a critical decision in her life, to stay with her job and give up the pursuit of a doctorate. She never obtained a formal Ph.D., but was later awarded an honorary Ph.D from New York University Tandon School of Engineering (then Polytechnic University of New York) in 1989 and honorary SD degree from Harvard university in 1998.

Elion never married or had children. She listed her hobbies as photography, travel and listening to music. After Burroughs Wellcome moved to Research Triangle Park in North Carolina, Elion moved to nearby Chapel Hill. Gertrude Elion died in North Carolina in 1999, aged 81.