Gill was born in 1882 in Brighton, Sussex (now East Sussex) and in 1897 the family moved to Chichester. Eric studied at Chichester Technical and Art School, and in 1900 moved to London to train as an architect with the practice of W.D. Caroe, specialists in ecclesiastical architecture. Frustrated with his training, he took evening classes in stone masonry at Westminster Technical Institute and in calligraphy at the Central School of Arts and Crafts, where Edward Johnston, creator of the London Underground typeface, became a strong influence. In 1903 he gave up his architectural training to become a calligrapher, letter-cutter and monumental mason.
In 1904 he married Ethel Hester Moore (1878–1961), and in 1907 he moved with his family to Sopers, a house in the village of Ditchling in Sussex, which would later become the centre of an artists' community inspired by Gill. There he started producing sculpture – his first public success was Mother and Child (1912).
In 1913 he moved to Hopkin's Crank on Ditchling Common, 2 miles north of the village. In 1914 he began the relief sculptures of the Stations of the Cross for Westminster Cathedral, London. In the same year he met the typographer Stanley Morison. After the war, together with Hilary Pepler, Desmond Chute and Joseph Cribb, Gill founded The Guild of St Joseph and St Dominic on Ditchling Common, where his pupils included the young David Jones. Jones began a relationship with Gill's daughter, Petra.
In 1924 Gill moved to Capel-y-ffin in Wales, where he set up a new workshop, to be followed by Jones and other disciples. His assistant Joseph Cribb remained behind in Ditchling, but his younger brother Lawrence (Laurie), who had worked with both Joseph and Gill in Ditchling, followed Gill to Wales in 1925. Laurie remined Gill's principal assistant until Gill's death and continued his workshop with Denis Tegetmeir (Petra's husband).
In 1925 Gill designed the Perpetua typeface for Morison, who was working for the Monotype Corporation. Its uppercase was based upon monumental Roman inscriptions. This was followed by the Gill Sans typeface in 1927–30, based on the sans-serif lettering originally designed by Johnston for London Underground. In the period 1930-31 Gill designed the typeface Joanna which he used to handset his book An Essay on Typography.
Gill soon tired of Capel-y-ffin (near Abergavenny), coming to feel that it had the wrong atmosphere, and also being too far from London, where most of his clients were. In 1928 he moved to Pigotts near High Wycombe in Buckinghamshire, where he set up a printing press and lettering workshop. He took on a number of apprentices, including David Kindersley, who in turn became a successful sculptor and engraver, and John Skelton (1923–1999), his nephew, and also noted as an important letterer and sculptor. Other apprentices included Donald Potter and Walter Ritchie. Others in the household included Denis Tegetmeier, married to Gill's daughter Petra, and Rene Hague, married to the other daughter, Joanna. In 1932 Gill produced a group of sculptures, Prospero and Ariel, for the BBC's Broadcasting House in London. In 1937, he designed a postage stamp for the Post Office, and in 1938 produced The Creation of Adam, three bas-reliefs in stone for the League of Nations building in Geneva. During this period he was made a Royal Designer for Industry by the Royal Society of Arts and became a founder-member of the newly established Faculty of Royal Designers for Industry. The award of RDI is the highest British award for designers.