Zilboorg was born into a Jewish family in Kiev, Ukraine on December 25, 1890 and studied medicine in St. Petersburg, where he worked under Vladimir Bekhterev.
Zilboorg emigrated to the United States in 1919 and supported himself by lecturing on the Chautauqua circuit and translating literature from Russian to English.
After graduating in 1926, he worked at the Bloomingdale Hospital and in 1931 began his psychoanalytic practice in New York City, having first been analysed in Berlin by Franz Alexander.
The musical Lady in the Dark is reportedly based on Moss Hart's experience of analysis with Zilboorg, who also examined other noted writers including Thomas Merton.
In an interview with Chernow, Edward M. M. Warburg reported that Zilboorg asked him for cash gifts and, in one instance, a mink coat for his wife.