Her family from Canton, Lily Li was born in Hong Kong in 1950. Educated in a Christian school, she was accepted into Shaw Brothers' actors' training course at the age of 14 only. Upon successfully completing her studies, Li was signed to an exclusive acting contract with Shaw Brothers in 1964.
Li's first film was The Knight of Knights. But the film that dubbed Li a star was in the Chang Cheh directed, David Chiang and Chang Pei-shan starring The Wandering Swordsman. Li left Shaw Brothers in 1979. She is still active in Taiwan and Hong Kong, mostly appears on TV.