She received a scholarship from Reading College at age 13 for her musical talent and studied acting at the Royal Academy of Dramatic Art in London.

After several years of marital strain, in part due to her husband's obsession with the ancient Chinese game Go, Lilian Fontaine decided to end the marriage.

[2] In 1922, the family moved to Saratoga, California, hoping that the climate there would improve the health of her daughters, who suffered from "recurring ailments".

Fontaine coached drama students when she lived in Saratoga, California, and she produced plays in a garden theatre that later was named for her.

[4] After both of her daughters reached film stardom, Fontaine returned to acting with a role in Billy Wilder's drama The Lost Weekend (1945) as the mother of Jane Wyman's character.