Born at Mårbacka (now in Sunne Municipality) an estate in Värmland in western Sweden, Lagerlöf was the daughter of Lieutenant Erik Gustaf Lagerlöf and Louise Lagerlöf née Wallroth. The couple's fourth child, she was born with a hip injury. An early sickness left her lame in both legs, although she later recovered. She was a quiet child, more serious than others her age, with a deep love of reading. The sale of Mårbacka following her father's illness in 1884 had a deep impact on her development.
Lagerlöf worked as a country schoolteacher in Landskrona for nearly 10 years while honing her story-telling skills, with particular focus on the legends she had learned as a child. Through her studies at the Royal Women's Superior Training Academy in Stockholm, Lagerlöf reacted against the realism of contemporary Swedish-language writers such as August Strindberg. She began her first novel, Gösta Berling's Saga, while working as a teacher in Landskrona. Her first break as a writer came when she submitted the first chapters to a literary contest, and won a publishing contract for the whole book. She received financial support of Fredrika Limnell, who wished to enable her to concentrate on her writing.
In 1909 Selma Lagerlöf won the Nobel Prize "in appreciation of the lofty idealism, vivid imagination and spiritual perception that characterize her writings". In 1914 she also became a member of the Swedish Academy, the body that awards the Nobel Prize in litterature. At the start of World War II, she sent her Nobel Prize medal and gold medal from the Swedish Academy to the government of Finland to help raise money to fight the Soviet Union. The Finnish government was so touched that it raised the necessary money by other means and returned her medal to her. In 1928, she received an honorary doctorate from the University of Greifswald's Faculty of Arts.