Gillan was born and raised in Inverness in the Scottish highlands, the only child of Marie (née Paterson) and Raymond Gillan, a singer and recording artist. When she turned 16, Gillan moved to Edinburgh and completed an HNC Acting and Performance course at Telford College. She moved to London at age 18 to study at the Italia Conti Academy of Theatre Arts drama school.
While studying at Italia Conti, Gillan was scouted by a modelling agency. Gillan has said she would not give up her acting career to return to modelling, stating that she enjoyed modelling but acting was always her main interest and goal.
Gillan's early television acting career included guest appearances on several drama series, with her first role being in an episode of Rebus, a role she obtained while still at Italia Conti. Gillan then undertook a two-year stint as a member of the ensemble cast of the sketch comedy series The Kevin Bishop Show, in which she played multiple characters including celebrities such as Katy Perry and Angelina Jolie. She appeared in the Channel 4 film Stacked, playing the role of Ginny. Gillan also appeared on TV in a leading role in a horror project entitled The Well, which was broadcast as a series of episodic short films on BBC Two and later as a web series on BBC.co.uk. Part of the BBC's multimedia "switch" programming, the short episodes interconnect with online games that further explore the environments presented in the series.
She was cast for the role of the Eleventh Doctor's first companion, Amy Pond, on the British sci-fi series Doctor Who in May 2009. She made her first on-screen appearance as Amy Pond in "The Eleventh Hour" with her cousin Caitlin Blackwood portraying a young Amelia (Amy) Pond. She appeared in the following sixth series in 2011 and the first five episodes of the seventh series in 2012. She reprised the role in a cameo appearance in the 2013 Christmas special "The Time of the Doctor". Gillan had appeared in Doctor Who once before in the series four episode "The Fires of Pompeii" in the role of a Soothsayer.
Gillan made her first theatre appearance playing the role of Shirley in John Osborne's play Inadmissible Evidence along with Douglas Hodge. The play debuted at the Donmar Warehouse on 16 October 2011.
During an interview at the 2011 San Diego Comic-Con, Gillan revealed that she would be returning to Doctor Who for its seventh series. On 15 December 2011, it was announced Gillan and Arthur Darvill (Rory Williams) would be leaving Doctor Who during the seventh series in 2012. On 26 January 2012, Karen Gillan played the part of supermodel Jean Shrimpton in the television film We'll Take Manhattan, which told the story of Shrimpton's relationship with the photographer David Bailey.
In August 2011, it was announced that Gillan would star in an indie Scottish rom-com called Not Another Happy Ending alongside Emun Elliott. She was selected by director John McKay because he came to know her during the production of We'll Take Manhattan, which he also directed, as "a very bubbly, vibrant, energetic, funny, slightly clumsy person" who was a perfect fit for the character. Filming took place in July 2012, though Elliott was replaced by Stanley Weber. Gillan told journalists that she was happy to be involved in a Scottish production that "isn't about drug use or fighting the English". The film premiered at the Edinburgh International Film Festival in June 2013.
Gillan starred in the lead role in the supernatural horror movie Oculus, which was filmed in Alabama and released in April 2014. She also revealed that she has been cast in comedian Charlie Brooker's TV series A Touch of Cloth. Gillan has also been cast in a film titled The List which began filming in Los Angeles in May 2013.
FHM magazine ranked Gillan number 42 on their list of the 100 Sexiest Women 2011, and in 2012, they also ranked her number 36. Gillan has also voiced advertisements for eHarmony and The Royal Bank of Scotland. In May 2013, Gillan was cast as Nebula in the Marvel superhero science fiction film Guardians of the Galaxy, which was released in August 2014. Gillan had her head shaved bald for the role.
Gillan joined the regular cast of Adult Swim's NTSF:SD:SUV:: for the show's third season in 2013. In November 2013 Gillan appeared on Broadway in a play called Time to Act, one of the plays included in "The 24 Hour Plays on Broadway" to benefit the non-profit Urban Arts Partnership.
In February 2014, Gillan was cast as the lead in Selfie, an American single-camera sitcom for ABC, which is produced by Warner Bros. Television and was greenlit for the 2014–15 US television season. Gillan played a social media-obsessed socialite named Eliza Dooley, a modern-day take on the main character from My Fair Lady, Eliza Doolittle. This is Gillan's first time starring in the lead role of an American television series. The series was cancelled by ABC on 7 November 2014 after seven episodes; the remaining six episodes were made available on Hulu starting 25 November 2014.
In May 2014, Gillan was cast in the Ti West-directed Western film In a Valley of Violence opposite John Travolta, Ethan Hawke and Taissa Farmiga. Gillan will portray Ellen, the older sister to Farmiga's character. Gillan also appeared in TV on the Radio's "Happy Idiot" music video, released on 3 October 2014. BuddyTV ranked her number six on its list of "TV's 100 Sexiest Women of 2014". In 2015, Gillan appeared in the Adam McKay-directed drama film The Big Short alongside Brad Pitt, Christian Bale, Ryan Gosling, Steve Carell and Melissa Leo.
Gillan wrote and directed her first short film, Coward, which screened at the 2015 Edinburgh Film Festival, and nominated for several awards. Later in the year she wrote, directed, and starred in another short film called Conventional.
In 2017, Gillan reprised her role as Nebula in Guardians of the Galaxy Vol. 2, this time becoming a member of the film's eponymous team, and co-starred in The Circle, alongside Emma Watson, Tom Hanks, and John Boyega. The latter film, released in April, was directed and written by James Ponsoldt, and was based on the novel by Dave Eggers.
On 30 August 2016, it was announced that Gillan was cast in the lead female role in the Jumanji sequel. Gillan starred alongside Dwayne Johnson, Kevin Hart, Jack Black and Nick Jonas. On 2 November 2016, it was announced that Gillan will write, direct and star in her feature directorial debut with Burbank-based development and production company Mt. Hollywood Films' indie drama project titled Tupperware Party. Set in her home city of Inverness in the Scottish Highlands, filming began in January 2017 and wrapped in the next month. The title of the film changed to The Party's Just Beginning. Also in January 2017, principal photography for Avengers: Infinity War and its untitled sequel began at Pinewood Atlanta Studios in Fayette County, Georgia, and is expected to shoot back-to-back with its sequel until late 2017. Gillan is set to appear in both films as Nebula.
In 2011, Gillan helped promote Fashion Targets Breast Cancer (FTBC) and the opening of Squirrel Ward in Great Ormond Street Hospital in London. During a 2012 interview on The Late Late Show, she stated that she had relocated to the US to star in the film Oculus.
She has stated that, though her family is Catholic, she was never baptised and is not religious, instead agreeing with the statement that, "we're just minuscule dots in the vast cosmic emptiness of the universe".