Growing up, Thomas was strongly influenced by the staunch feminism of her mother and her mother's sister Hannah Whitall Smith. Her father, a physician, was not completely happy with feminist ideas, but his daughter was fiercely independent and he supported her in all of her independent endeavors. Though both her parents were orthodox members of the Society of Friends, Thomas' education and European travel led her to question those beliefs and develop a love for music and theater, both of which were forbidden to Orthodox Quakers. This religious questioning led to friction with her mother.
Thomas graduated from Cornell University in 1877. She did graduate work at Johns Hopkins University but withdrew because she was not permitted to attend classes. She did further graduate work at the University of Leipzig, but that university did not grant degrees to women. She then went to the University of Zurich and earned a Ph.D. in linguistics, summa cum laude, in 1882 for her dissertation which was a philological analysis of Sir Gawain and the Green Knight. She was the first woman to receive such a doctorate at a European university. She then spent some time in Paris, where she attended lectures by Gaston Paris at the Sorbonne, and then went back home to the United States.
In 1884, Thomas became dean of the college and chair of English at the new Bryn Mawr College for women. Thomas was the first female dean in the United States.
In 1885 Thomas, together with Mary Elizabeth Garrett, Mamie Gwinn, Elizabeth King, and Julia Rogers, founded The Bryn Mawr School in Baltimore Maryland. The school would produce well-educated young women who met the very high entrance standards of Bryn Mawr College.
In 1894, the first president of the college, James Rhoads, retired, and Thomas was narrowly elected to succeed him. She was president until 1922 and remained as Dean until 1908. During her tenure as president, Thomas was instrumental in bringing several additions to the College, including buildings that brought collegiate Gothic architecture to the United States.
In 1908, she became the first president of the National College Women's Equal Suffrage League. She was also a leading member of the National American Woman Suffrage Association. After 1920 she advocated the policies of the National Woman's Party. She was one of the early promoters of an equal rights amendment to the U.S. Constitution.
Thomas lived for many years in a lesbian relationship with Mamie Gwinn. After Gwinn left Thomas in 1904 to marry (a love triangle fictionalized in Gertrude Stein's Fernhurst), Thomas started another lesbian relationship with Mary Garrett; they shared the campus home, living together until Garrett's death. Miss Garrett, who had been prominent in suffrage work and a benefactor of Bryn Mawr, left to President Thomas $15,000,000 to be disposed of as she saw fit.
Thomas died in Philadelphia, Pennsylvania. Her ashes were scattered on the Bryn Mawr College campus in the cloisters of the Thomas Library. (Contrary to popular belief, her body was not buried there.)