Gilpin was the daughter of Frank and Emma Gilpin. Her father came from Philadelphia and was involved cattle ranching. In an interview she said her father was a friend of the great landscape photographer William Henry Jackson, although she does not believe that she actually met him until after she was well along in her own photography career. Her mother grew up in St. Louis and Chicago, and although she moved to Colorado to be with her husband she longed for the more cultured surroundings of big cities. Gilpin's birthplace was in a home in Austin Bluffs, some from their ranch at Horse Creek. This was the closest place that had a doctor, and since this was her first child Mrs. Gilpin did not want to take any chances.

In 1903, for her twelfth birthday. Gilpin received a brownie camera from her parents, and she used it incessantly for several years. She believed the year 1904 was a critical point in her life. Her mother sent her to visit her closest friend and Gilpin's namesake, Laura Perry, in St. Louis where the World's Fair was being held. Perry was blind, and it was Gilpin's task to describe every exhibit to her in detail. She later said "The experience taught me the kind of observation I would have never learned otherwise."

Her mother encouraged her at an early age to study music, and she was educated at eastern boarding schools, including the New England Conservatory of Music, from 1905-1910. On her first trip to the East her mother took her to New York to have her portrait taken by well-known photographer Gertrude Käsebier. Later when she decided to become a photographer, Gilpin asked Käsebier if she would be her mentor. Over the years they developed a life-long friendship.

When family finances declined (and the hoped-for musical talent did not develop), Gilpin returned to Colorado. She soon became friends with an acquaintance of her family William Jackson Palmer, a railroad and military man who helped develop rail-related industries such as steel mills in Colorado. He instilled a love of nature in her by taking her horseback riding and educating her in the names of plants and animals.

In 1916 she moved to New York to study photography, but she returned to Colorado Springs in 1918 after becoming seriously ill from influenza. Her mother hired a nurse, Elizabeth (Betsy) Forster, to care for her, and Gilpin and Forster became friends and, later, companions. She frequently photographed Forster during the more than fifty years they were together, sometimes placing her in scenes with other people as though she were part of a tableau she happened to come upon. They remained together, with occasional separations necessitated by available jobs, until Forster's death in 1927. After Gilpin recovered she opened her own commercial photography studio in Colorado Springs. She was moderately successful for a while, but in 1927 her mother died. She was left to care for her father who by that time moved from job to job.

She lived for a while in Wichita, Kansas, working for the Boeing Company as a photographer of their airplanes. She left there in 1944, shortly after her father's death, and returned to her beloved Colorado. She continued working and photography throughout the Southwest until her death.

Gilpin said she made her earliest dated autochome in 1908 when she was 17 years old. Since this process had only become widely available the year, she showed remarkable interest in photography for a teenage girl at that time. When she decided she wanted to seriously study photography, Käsebier advised her to go to at the Clarence White School in New York City. She moved there from 1916—1918 and learned the techniques and craft of her trade. She deeply admired White, whom she later called "one of the greatest teachers I have ever known in any field". Her early work was in the Pictorialist style, but by the 1930s she had moved away from the soft-focus look of that style. She found her true vision in the peoples and landcsapes of the American Southwest, and she published several books on the region. Like her mentor Käsebier she made her living taking portraits, but in the mid-1930s she began to receive critical acclaim for her photographs of the Navajo and Pueblo peoples and for her landscapes. By the end of that decade she was exhibiting photos in shows throughout the United States and in Europe.

She went to become one of the great masters of the art of platinum printing, and many of her platinum prints are now in museums around the world. She said "I have always loved the platinum printing process. It's the most beautiful image one can get. It has the longest scale and one can get the greatest degree of contrast. It's not a difficult process; it just takes time."

Over a thirty-year period from 1945-1975 her work was seen in more than one hundred one-person and group exhibits.

In 1974 the governor of New Mexico awarded her one of the first Annual Awards for Excellence in the Arts. She continued to be very active as a photographer and as a participant in the Santa Fe arts scene until her death in 1979.

Gilpin's photographic and literary archives are now housed at the Amon Carter Museum in Fort Worth, Texas.