Whit Stillman was born in 1952 in Washington, DC, to Margaret Drinker (née Riley), from Philadelphia, Pennsylvania, and a Democratic Politician, John Sterling Stillman, an assistant secretary of commerce under President John F. Kennedy (a classmate of Stillman's father at Harvard), from Washington, DC. His great-grandfather was businessman James Stillman and his great-great-grandfather, Charles Stillman, was the founder of Brownsville, Texas. Stillman grew up in Cornwall, New York and experienced depression during puberty. "I was very depressed when I was 11 or 12," he told The Wall Street Journal. "I was sent to the leading Freudian child Psychologist in Washington, D.C. It was heck. The last thing I needed to talk about was guilt about sex." However, when his parents separated, he found that his depression ceased: "I actually felt healthier."

After graduating from Harvard in 1973, Stillman began working as an editorial assistant at Doubleday in New York City, followed by a stint as a junior Editor at The American Spectator. (Stillman has since downplayed his work at The American Spectator, expressing a Desire to remain "apolitical".)

The Last Days of Disco was loosely based on Stillman's experiences in various Manhattan nightclubs, including Studio 54. The film concerns Ivy League and Hampshire graduates falling in and out of love in the disco scene of Manhattan in the "very early 1980s". Chloë Sevigny and Kate Beckinsale play roommates with opposite personalities who frequent disco clubs together. The Last Days of Disco concludes a trilogy loosely based on Stillman's life and contains many references to the previous two films: a character considers a move to Spain to work for American ad agencies there after meeting with the Barcelona character of Ted Boynton, and Metropolitan's heroine Audrey Rouget reappears briefly as a successful publisher, as do a few other characters from that film, as clubgoers. In 2000 Stillman published a novelization of the film, The Last Days of Disco, with Cocktails at Petrossian Afterwards. The novelization won the French 2014 Prix Fitzgerald Award.

Stillman wrote the screenplay for Metropolitan between 1984 and 1988 while running an illustration agency in New York, and financed the film by selling the insider rights to his apartment (for $50,000) and with the contributions of friends and relatives. Loosely based on real-life events Stillman had experienced while living in Manhattan, with his divorced mother during the week of Christmas break 1969 during his first year at Harvard, Metropolitan tells the story of the alienated Princetonian Tom Townsend's introduction to the "Sally Fowler Rat Pack" (SFRP), a small group of preppy, Upper East Side Manhattanites making the rounds at debutante balls during Christmas break of their first year in college. Though he is a socialist deeply skeptical about the SFRP's upper-class values, Tom (Edward Clements) grows increasingly attached to the cynical Nick (Chris Eigeman) and plays an important part, of which he is largely unaware, in the life of Audrey (Carolyn Farina), a young debutante. Many of the exclusive interior locations were lent to Stillman by family friends and relatives.

Stillman wrote and directed three comedies of manners released in the 1990s: Metropolitan (1990), Barcelona (1994), and The Last Days of Disco (1998); he published a novel based on the last of these films. After completing his film trilogy, Stillman departed from independent comedy and started researching and writing a series of scripts set abroad. In August 1998 (shortly after The Last Days of Disco was released) he left his loft conversion in Manhattan's SoHo and relocated to Paris. He returned to New York in 2010.

Stillman won Best First Feature at the 6th Independent Spirit Awards and was nominated for an Academy Award in 1991 for Best Original Screenplay. Metropolitan was also nominated for the Grand Jury Prize (Drama) at the 1990 Sundance Film Festival. He won the 1990 New York Film Critics Circle Award for Best New Director. The movie was a financial success, grossing about $3 million on a budget of $225,000.

Stillman stated in 2006 that he was working on several unfinished scripts. He had been slated to direct a film adaptation of Christopher Buckley's novel Little Green Men, but in a 2009 interview, Stillman said the adaptation is "[not] happening, at least with me." He was writing another film, Dancing Mood, set in Jamaica in the 1960s which did not go into production and filming. In 2014 Stillman wrote and directed the pilot episode of a TV series, The Cosmopolitans, for Amazon Studios which remained in negotiation as late as January 2016.

After a 13-year hiatus, Stillman released his fourth film, Damsels in Distress, starring Greta Gerwig, Adam Brody, Hugo Becker and Analeigh Tipton. It premiered September 10 at the 2011 Venice Film Festival as the closing film, to favorable reviews. The film is "about three young women at an East Coast university, the transfer student that joins their group and the young men they become entangled with."

Stillman wrote a novelization of The Last Days of Disco published by Farrar, Straus and Giroux under the same title, with the added subtitle "...With Cocktails at Petrossian Afterwards". It won the French 2014 Prix Fitzgerald Award. Stillman also wrote the novelization of his 2016 film Love & Friendship.

In April 2016, the Criterion Collection released a retrospective box set edition of Metropolitan, Barcelona, and The Last Days of Disco, available on Blu-ray and DVD. Stillman himself oversaw the digital transfers of the films and recorded audio commentaries along with members of the casts and crews.

The Wexner Center for the Arts at the Ohio State University held a 25-year retrospective of the career and films of Stillman including his film titled Love & Friendship. At the time of the retrospective, Stillman was asked: "Your films all have a sort of costume drama sensibility, but without the costumes, and now you’ve made a costume drama, period dress and all." Stillman responded by stating that: "Love & Friendship doesn’t loom as a costume drama, because it’s a pretty funny comedy, so it’s really not what you might anticipate. It’s not Downton Abbey in any way, shape or form. There are a lot of very good English comic actors who have done the supporting parts and really shine. I love Jane Austen. I sort of wanted something of my own to work on between paid script writing assignments. It’s good that I had so much time with no Producer or studio executive wanting delivery quickly because it’s an incredibly funny novella she wrote, but hard to read and hard to dramatize. It’s an epistolary form from the 18th century and there are all these very funny ideas and lines buried within. It’s kind of an inaccessible format and it was a long process of adaptation."