Gilpin was born in Cumberland, the son of Captain John Bernard Gilpin, a soldier and amateur artist. From an early age he was an enthusiastic sketcher and collector of prints, but while his brother Sawrey Gilpin became a professional painter, William opted for a career in the church, graduating from Queen's College, Oxford in 1748.

While still at Oxford, Gilpin anonymously published A Dialogue upon the Gardens ... at Stow in Buckinghamshire (1748). Part guidebook to Stowe, part essay on aesthetics, this shows that Gilpin had already begun to develop his ideas on the picturesque. Unusually for the time, Gilpin showed an appreciation of wild and rugged mountain scenery, perhaps rooted in his Cumbrian upbringing; even more unusually, he expressed ideas about the perception of beauty which were purely aesthetic and often divorced from other qualities of the object viewed, such as morality or utility.

After working as curate, Gilpin became master, and from 1755 headmaster, at Cheam School. He was an enlightened educationist, instituting a system of fines rather than corporal punishment and encouraging the boys to keep gardens. Gilpin stayed at Cheam until 1777 when he moved, with his wife Margaret, to become Vicar of Boldre in the New Forest in Hampshire. He was succeeded at Cheam by his son, another William Gilpin.

See also: Picturesque

In 1768 Gilpin published his popular Essay on Prints where he defined the picturesque as '"that kind of beauty which is agreeable in a picture" and began to expound his "principles of picturesque beauty", based largely on his knowledge of landscape painting. During the late 1760s and 1770s Gilpin travelled extensively in the summer holidays and applied these principles to the landscapes he saw, committing his thoughts and spontaneous sketches to notebooks.Gilpin's tour journals circulated in manuscript to friends, such as the poet William Mason, and a wider circle including Thomas Gray, Horace Walpole and King George III. In 1782, at the instigation of Mason, Gilpin published Observations on the River Wye and several parts of South Wales, etc. relative chiefly to Picturesque Beauty; made in the summer of the year 1770 (London 1782). This was illustrated with plates based on Gilpin's sketches, etched by his nephew William Sawrey Gilpin using the new aquatint process. There followed Observations on the Lake District and the West of England and, after his move to Boldre Remarks on Forest Scenery, and other woodland Views ... (London 1791).

For Gilpin, both texture and composition were important in a "correctly picturesque" scene. The texture should be "rough", "intricate", "varied", or "broken", without obvious straight lines. The composition should work as a unified whole, incorporating several elements: a dark "foreground" with a "front screen" or "side screens", a brighter middle "distance", and at least one further, less distinctly depicted, "distance". A ruined abbey or castle would add "consequence". A low viewpoint, which tended to emphasise the "sublime", was always preferable to a prospect from on high. While Gilpin allowed that nature was good at producing textures and colours, it was rarely capable of creating the perfect composition. Some extra help from the artist, perhaps in the form of a carefully placed tree, was usually required.

In contrast to other contemporary travel writers, such as Thomas Pennant, Gilpin included little history, and few facts or anecdotes. Even Gilpin's descriptions can seem quite vague, concentrating on how scenery conformed to picturesque principles rather than its specific character. In one much-quoted passage, Gilpin takes things to an extreme, suggesting that "a mallet judiciously used" might render the insufficiently ruinous gable of Tintern Abbey more picturesque. In the same work he criticises the poet John Dyer for describing a distant object in too much detail. Such passages were easy pickings for satirists such as Jane Austen demonstrated in Northanger Abbey as well as many of her other novels and works. (Elizabeth Bennet, in Pride and Prejudice, notably refuses to join Mr. Darcy and the Bingley sisters in a stroll with the teasing observation, "You are charmingly group'd, and...The picturesque would be spoilt by admitting a fourth.")

Although he came in for criticism, Gilpin had published at the exactly the right time. Improved road communications and travel restrictions on continental Europe saw an explosion of British domestic tourism in the 1780s and 1790s. Many of these picturesque tourists were intent on sketching, or at least discussing what they saw in terms of landscape painting. Gilpin's works were the ideal companions for this new generation of travellers; they were written specifically for that market and never intended as comprehensive travel guides.

Although Gilpin sometimes commented on designed landscapes, for him the picturesque was always essentially just a set of rules for depicting nature. It was left to others, most notably Richard Payne Knight, Uvedale Price and Thomas Johnes, to develop Gilpin's ideas into more comprehensive theories of the picturesque and apply these more generally to landscape design and architecture. Ultimately, these grand theories of wild natural beauty gave way to the tamer and more commercialised picturesque of the mid 19th century. But Gilpin's works remained popular and several new editions, with additions by John Heaviside Clark, were brought out. Even today, when a tourist composes a photograph with their camera, they may be unconsciously applying principles originally popularised by Gilpin.

Gilpin also lives on as the model for the satirist William Combe's clever but cruel Tour of Dr Syntax in Search of the Picturesque (1809), brilliantly illustrated by Thomas Rowlandson. This poor curate sets off on his straggly mare Grizzle in a quest for picturesque scenery, often (and usually to his discomfort) oblivious to the realities of the world around him.

As well as his picturesque writing, Gilpin published numerous works on moral and religious subjects, including biographies of Hugh Latimer, Thomas Cranmer and John Wicliff. A proportion of the profit from his writing went on good works in his parish, including the endowment of the school at Boldre which now bears his name. Many of the manuscripts of his tours, including unpublished or only recently published material, are now housed in the Bodleian Library, Oxford.