Lilian Terry was born Liliane Therese Cachia on December 15, 1930, in Cairo, Egypt. Wikipedia describes her as the daughter of an Italian father and Maltese mother; Discogs' own artist biography for her instead reads "British Subject by Maltese father. Italian mother," reversing which parent held which nationality. Either way, both parents were part of Cairo's mixed European expatriate community rather than ethnically Egyptian, and Terry moved with her family to Rome at age nine, around 1939 or 1940. There she trained formally, graduating in piano from the Accademia Nazionale di Santa Cecilia in 1947, and spent essentially her entire adult life and career in Italy.

She made her official singing debut in 1952 at the Circolo Jazz in Rome, and the following year became the first jazz singer to appear on Italian television, during RAI's experimental broadcast phase, while also appearing on the radio program Chimere. Her earliest Discogs-documented recording is a 1958 co-billed single with the Enrico Intra Quintet, Hoopa Hoola, and that same year she recorded a second RCA Italiana album alongside trumpeter Nunzio Rotondo and pianist Romano Mussolini, released as Romano Mussolini Con Nunzio Rotondo E Lilian Terry. She and Mussolini had already worked together on Italian television and radio in the mid-1950s, with Mussolini accompanying her on the programs Toto-Club and Canta Lilian Terry.

From 1959 she recorded prolifically for CGD, mostly Italian-language pop and vocal-jazz singles, alongside English-language swing sides. The 1960 LP In Swing! and a run of contemporary singles drew on a studio band of Milan's leading jazz musicians, later documented in full on the 2011 reissue CGD Days Collection: guitarist Franco Cerri, tenor saxophonist Gianni Basso, trombonist Dino Piana, pianist Enrico Intra, drummer Gianni Cazzola, bassist Giorgio Azzolini and trumpeter Oscar Valdambrini, several of them members of the Basso-Valdambrini Sextet. Her single "My Heart Belongs to Daddy" reached number 19 on the Italian hit parade in 1962, the same year she recorded two singles as "Four of Us" with the visiting Swiss pianist George Gruntz's trio (bassist George Joyner, drummer Earl "Buster" Smith), including a vocal version of Thelonious Monk's "'Round About Midnight." In 1963 she performed at the Comblain-la-Tour jazz festival in Belgium, documented on the release Welcome Back to Comblain-la-Tour.

In 1965 she founded the "Terry's Mad Pad" jazz club in Rome. By her own account she served as vice-president of the European Jazz Federation's education division from 1967, part of a sustained effort to build jazz education programs in Italy; some later profiles credit her more broadly as a cofounder of the Federation itself, a claim this profile could not independently confirm beyond her own site. Her later 1960s and 1970s singles moved toward bossa-nova-inflected material, including 1967's "Mille Parole d'Amore," and she continued recording into 1970 with the film composer Piero Umiliani conducting.

Terry's most significant recorded partnerships came late in her career and were with two visiting American jazz greats. In 1982 she recorded the duo album A Dream Comes True in Milan with pianist Tommy Flanagan, and in 1985, also in Milan, she recorded Oo-Shoo-Be-Doo-Be...Oo, Oo...Oo, Oo with Dizzy Gillespie, backed by pianist Kenny Drew, bassist Isla Eckinger and drummer Ed Thigpen, with liner notes by the jazz journalist Mike Hennessey. From 1983 to 1996 she directed the Dizzy Gillespie Popular School of Music in Bassano del Grappa, named for her recording partner and friend. She translated Gillespie's autobiography and writing by Duke Ellington into Italian, and later accounts of her career, including her own 2017 memoir, describe decades of friendships and broadcast interviews with a wider circle of American jazz figures: Ellington, the Count Basie Orchestra, Oscar Peterson, Ornette Coleman, Horace Silver, McCoy Tyner, Max Roach, Steve Lacy, Bill Evans, Abbey Lincoln, Ray Charles and Nina Simone among them. Some later tributes also place Thelonious Monk among her circle of friends, though this profile found no Discogs-documented recording or independently dated account of a meeting between them; her only Discogs-confirmed connection to a Monk composition is her own 1962 vocal recording of "'Round About Midnight."

In 2003 Terry recorded Emotions in Chicago with her son, pianist and arranger Francesco Crosara, and the Chicago tenor saxophone legend Von Freeman, alongside guitarist and vocalist Paulinho Garcia. She retired from performing in March 2005. Her 2017 memoir, Dizzy, Duke, Brother Ray, and Friends: On and Off the Record with Jazz Greats (University of Illinois Press), gathers interviews and informal conversations she recorded across her broadcasting career, with chapters built around Gillespie, Ellington, Charles, Lincoln, Roach, Silver and Evans. She died on June 29, 2023, in Nice, France, of a sudden heart attack during dialysis treatment, at age 92.

Terry came up as a swing-era vocalist in the American mold, her early CGD sides pairing standards and bebop-adjacent material ("Charley Bop!," a vocal "Tune Up," a vocal "'Round About Midnight") with a parallel career singing Italian-language pop for the same label. That double identity, "Italy's First Lady of Jazz" on one side of the catalog and a hit-parade pop singer on the other, ran throughout her recording career; even her most Italian material, like the 1970 Piero Umiliani-conducted single, sits alongside jazz-vocal dates cut with visiting Americans. Her two most fully realized jazz statements came in the 1980s, both duo records built around a single world-class American accompanist, Tommy Flanagan and then Dizzy Gillespie, that gave her far more space than the CGD-era studio-band sides had.

As a broadcaster and organizer she was arguably more consequential to Italian jazz than as a recording artist: the first jazz singer on Italian television, a RAI jazz producer who booked and interviewed touring American musicians for decades, the founder of a Rome jazz club, an advocate for jazz education through the European Jazz Federation, and, in the 1980s and 1990s, the director of a music school named for her friend and collaborator Dizzy Gillespie.