Born Kathleen Mary Lonergan in the Bronx, New York, she was known for her contributions as alderman of the 48th Ward, and her work as Director of the Mayor's Office of Special Events under Richard M. Daley.
Osterman's career was characterized by her advocacy for the LGBTQ community, efforts in urban restoration and development, and leadership in organizing events and festivals in Chicago.
In 1987 Osterman emerged victorious from an eleven-person race in which Mayor Harold Washington declined to endorse any candidate, and was elected alderman of the lakefront 48th Ward,[3] which at that time consisted primarily of the Edgewater community as well as parts of Uptown.
During her brief tenure, Osterman worked on the rehabilitation of the Broadway Armory and the restoration of two vintage mansions in Berger Park along Sheridan Road, as public facilities.
In 2021, Mayor Lori Lightfoot announced the return of the Kathy Osterman Awards, an annual ceremony which honors outstanding city employees across various departments.