Lorraine Hansberry was the fourth child born to Carl Augustus Hansberry (a prominent real estate broker) and Nannie Louise Perry, and niece of the Africanist Professor William Leo Hansberry, after whom the Hansberry Institute of African Studies in the University of Nigeria, Nsukka, Nigeria, was named. Her maternal uncle Graham T. Perry, was one of the first African American attorneys-general for the State of Illinois. She grew up on the south side of Chicago in the Woodlawn neighborhood.Harris, William, Woodlawn, University partners in education through Charter School, University of Chicago Chronicle, Vol. 26 No. 2 (Oct. 5, 2006),

The family moved into an all-white neighborhood, where they faced racial discrimination. Hansberry attended a mostly white public school while her parents fought against segregation. Hansberry's father engaged in a legal battle against a racially restrictive covenant that attempted to prohibit African-American families from buying homes in the area. The legal struggle over their move led to the landmark Supreme Court case Hansberry v. Lee, 311 U.S. 32 (1940). Though victorious in the Supreme Court, Hansberry's family was subjected to what Hansberry would later sarcastically describe as a "warm and cuddly white neighborhood". This experience later inspired her to write her most famous work, A Raisin in the Sun. Her family home at 6140 S. Rhodes Ave. has since been designated a City of Chicago landmark.

Hansberry attended the University of Wisconsin—Madison, but found college to be uninspiring and left in 1950 to pursue her career as a writer in New York City, where she attended The New School. She worked on the staff of the Black newspaper Freedom under the auspices of Paul Robeson, and also worked with W. E. B. DuBois, whose office was in the same building. A Raisin in the Sun was written at this time, and was a huge success. It was the first play written by an African-American woman to be produced on Broadway. At 29 years, she became the youngest American playwright and only the 5th woman to receive the New York Drama Critics Circle Award for Best Play. While many of her other writings were published in her lifetime - essays, articles, and the text for the SNCC book The Movement, the only other play given a contemporary production was The Sign in Sidney Brustein's Window.

In 1961, Hansberry was set to replace Vinnette Carroll as the director of the musical, Kicks and Co, after its try-out at Chicago's McCormick Place. It was written by Oscar Brown, Jr. and featured an interracial cast including Lonnie Sattin, Nichelle Nichols, Vi Velasco, Al Freeman, Jr., Zabeth Wilde and Burgess Meredith in the title role of Mr. Kicks. A satire involving miscegenation, the $400,000 production was co-produced by her husband Robert Nemiroff, but despite a warm reception in the Windy City, the show never made it to Broadway.

After a long battle with pancreatic cancer she died on January 12, 1965 at the age of 34. According to James Baldwin, Hansberry was prescient about many of the increasingly troubling conditions in the world, and worked to remedy them with literature. Baldwin believed "it is not at all farfetched to suspect that what she saw contributed to the strain which killed her, for the effort to which Lorraine was dedicated is more than enough to kill a man."

The Sign in Sidney Brustein's Window ran for 110 performances on Broadway and closed the night she died. Her ex-husband Robert Nemiroff became the executor for several unfinished manuscripts. He added minor changes to complete the play Les Blancs, which Julius Lester termed her best work, and he adapted many of her writings into the play, To Be Young, Gifted and Black, which was the longest-running Off-Broadway play of the 1968-1969 season. It appeared in book form the following year under the title, To Be Young, Gifted and Black: Lorraine Hansberry in Her Own Words.

She left behind an unfinished novel and several other plays, including The Drinking Gourd and What Use Are Flowers?, with a range of content, from slavery to a post apocalyptic future.

Raisin, a musical based on A Raisin in the Sun, opened in New York in 1973, winning the Tony Award for Best Musical, with the book by Nemiroff, music by Judd Woldin, and lyrics by Robert Britten.

A Raisin in the Sun was revived on Broadway in 2004 and received a Tony Award nomination for Best Revival of a Play. The cast included Sean "P Diddy" Combs as Walter Lee Younger Jr., Phylicia Rashad (Tony Award winner for Best Actress) and Audra McDonald (Tony Award winner for Best Featured Actress). It was produced for television in 2008 with the same cast; the production garnered two NAACP Image awards.

Hansberry contributed to the understanding of abortion, discrimination, and Africa. She joined the Daughters of Bilitis and contributed letters to their magazine, The Ladder, in 1957 that addressed feminism and homophobia.

In San Francisco, The Lorraine Hansberry Theatre, which specializes in original stagings and revivals of African-American theatre, is named in her honor. Singer and pianist Nina Simone, who was a close friend of Hansberry, used the title of her unfinished play to write a civil rights-themed song "To Be Young, Gifted and Black" together with Weldon Irvine. The single reached the top 10 of the R&B charts. A studio recording by Simone was released as a single and the first live recording on October 26, 1969 was captured on Black Gold (1970).

She is the first cousin of director and playwright Shauneille Perry, whose eldest child is named after her. Her grandniece is actress Taye Hansberry. Her cousin is the flautist, percussionist, and composer Aldridge Hansberry.Lincoln University's first-year female dormitory is named Lorraine Hansberry Hall. There is a school in the Bronx called Lorraine Hansberry Academy and an elementary school in St. Albans, New York named after the famous author and playwright.

In 2002, scholar Molefi Kete Asante listed Lorraine Hansberry on his list of 100 Greatest African Americans.

Both A Raisin in the Sun and A Sign in Sidney Brustein's Window are staples of high school English classrooms. A Raisin in the Sun famously opens with Langston Hughes' poem "Harlem".