Lila Lee was born Augusta Wilhelmena Fredericka Appel in Union Hill, New Jersey into a middle-class family of German immigrants who relocated to New York City when Lila was quite young. Searching for a hobby for their gregarious young daughter, the Appels enrolled Lila in Gus Edwards' kiddie review shows where she was given the nicknamed "Cuddles"; a name that she would be referred to by for the rest of her acting career. Her stagework became so popular with the public that her parents had her educated with private tutors. Edwards would become Lee's long-term manager.
In 1918 she was chosen for a film contract by Hollywood film mogul Jesse Lasky for Famous Players-Lasky Corporation, which later became Paramount Pictures. Her first feature The Cruise of the Make-Believes garnered the seventeen year old starlet much public acclaim and Lassky quickly sent Lee on an arduous publicity campaign. Critics lauded Lila for her wholesome persona and sympathetic character parts. Lee quickly rose to the ranks of leading lady and often starred opposite such matinee heavies as Conrad Nagel, Gloria Swanson, Wallace Reid, Roscoe 'Fatty' Arbuckle, and Rudolph Valentino.
In 1922 Lee was cast as Carmen in the enormously popular film Blood and Sand, opposite matinee idol Rudolph Valentino and silent screen vamp Nita Naldi; Lee subsequently won the first WAMPAS Baby Stars award that year. Lee continued to be a highly popular leading lady throughout the 1920's and made scores of critically praised and widely watched films.