Lilli Carati was born in Varese (Lombardy). In 1974, she was named "Miss Elegance" at a beauty contest in Calabria and began working as a fashion model in Milan. She was first runner-up at Miss Italia contest of 1975 and moved on to cinema.

The first film she played the lead role was 1976 La professoressa di scienze naturali ("School Days") by Michele Massimo Tarantini. In this film, Carati plays a substitute Teacher of natural science named Stefania Marini who soon gets one of her students, Andrea (Marco Gelardini), as her lover and a physician Baron Cacciapuopolo (Michele Gammino) as an admirer. In the end, she marries the Baron but keeps Andrea as a lover.

Her next "school film" was La compagna di banco by Mariano Laurenti in 1977. In this film, Carati is a rich schoolgirl and a basketball player named Simona Girardi with a lover named Mario (Antonio Melidoni). Alvaro Vitali, a regular of school films, is present in both films as the main comic character. The same year she played Paola in the poliziotteschi film Gangbuster, opposite Ray Lovelock and Mel Ferrer.

Her greatest success came with Avere vent'anni ("To Be Twenty") by Fernando Di Leo in 1978. The film, about the story of two girls who leave home and move into a hippie commune in pursuit of freedom but end up in the hands of thugs to be violently murdered, later attained a cult status as expressed by its screening at Venice Film Festival in 2004. In this film, the side-kick to Carati (Tina) was Gloria Guida (Lia), a popular star of the 1970s. The film also contains a brief lesbian sex scene with the two actresses.

In Il corpo della ragassa (1979) by Pasquale Festa Campanile, Carati plays Teresa Aguzzi, a naïve-looking but cunning country girl involved in a Pygmalion story set in 1950s Italy. The same year she appeared in Senza buccia (Skin Deep) by Marcello Aliprandi, a story of love relationships at a holiday hideout.

In There Is a Ghost in My Bed (1980), an Italo-Spanish production by èClaudio de Molinis, she played newlywed Adelaide Fumagalli who arrives at the "Black Castle" in England with her husband on honeymoon. The castle is home to the ghost of 17th century nobleman Sir Archibald, played by veteran actor Renzo Montagnani who played Teresa's father in Il corpo della ragassa. Sir Archibald plays his games to seduce Adelaide which will eventually end badly for himself.

Il marito in vacanza (1981) by Alessandro Lucidi and Mario Lucidi would again bring Carati and Montagnani together. This time Montagnani is a professor who tries to seduce Lucia Coradini (Carati), a beautiful colleague.

In 1984, Carati met Director Joe d'Amato through her Actress friend Jenny Tamburi and played in four D'Amato films, among which are L'alcova (The Alcove, 1984) and Il piacere (The Pleasure, 1985), both set in 1930s Italy and with Laura Gemser.

In 1987 and 1988, she appeared in a number of adult films by Giorgio Grand, along with a team of performers including Rocco Siffredi.

In 1989, she was in The Whore by Alex de Renzy and Henri Pachard. This film had the most elaborate plot among her porn films but she didn't play the lead role.

She also appeared in nude photos on the pages of Italian men's magazines like Playmen and Albo Blitz. Around 1990, she retired from public life. On 20 October 2014, she died of a brain tumour.