Lady Gregory is mainly remembered for her work behind Irish Literary Revival. Her home at Coole Park, County Galway served as an important meeting place for leading Revival figures, and her early work as a member of the board of the Abbey was at least as important for the theatre's development as her creative writings. Lady Gregory's motto was taken from Aristotle: "To think like a wise man, but to express oneself like the common people.
Lady Gregory was born the youngest daughter of the Anglo-Irish landlord class family Persse in Roxborough, County Galway. Her mother, Frances Barry, was related to Standish Hayes O'Grady, 1st Viscount Guillamore, and her family home, Roxborough, was a 6,000 acre (24 km²) estate, the big house of which was later burnt down during the Irish Civil War. She was educated at home, and her future career was strongly influenced by the family nurse (i.e. nanny), Mary Sheridan, a Catholic and a native Irish speaker, who introduced the young Isabella Augusta Persse to the history and legends of the local area. This early introduction may have had a greater impact on her than it otherwise would because the house had no library and her mother, a strict evangelical Protestant, forbade her to read novels until she was 18.
She married Sir William Henry Gregory, a widower with an estate at Coole Park, near Gort, County Galway on 4 March 1880, at a Protestant church in Dublin. As the wife of a knight, she became entitled to be called "Lady Gregory". Sir William, who was 35 years older than his bride, had just retired from his position of Governor of Ceylon (now Sri Lanka), having previously served several terms as Member of Parliament for Galway County. He was a well-educated man with many literary and artistic interests, and the house at Coole Park housed a large library and extensive art collection, both of which his bride was eager to explore. He also had a house in London, and the couple spent a considerable amount of time there holding a weekly salon which was frequented by many of the leading literary and artistic figures of the day, including Robert Browning, Lord Tennyson, John Everett Millais and Henry James. Their only child, Robert Gregory, was born in 1881. He was killed while serving as a pilot during the First World War, an event that inspired Yeats's poems "An Irish Airman Foresees His Death" and "In Memory of Major Robert Gregory".
Her earliest work to appear under her own name was Arabi and His Household (1882), a pamphlet—originally a letter to The Times newspaper—in support of Ahmed Orabi Pasha, leader of what has come to be known as the Urabi Revolt - an 1879 Egyptian nationalist revolt against the oppressive regime of the Khediveand against European domination of Egypt. She later said of this booklet, "whatever political indignation or energy was born with me may have run its course in that Egyptian year and worn itself out". Despite this, in 1893 she published A Phantom’s Pilgrimage, or Home Ruin, an anti-Nationalist pamphlet against William Gladstone's proposed second Home Rule Act. She performed charitable work in the parish of St. Stephen’s, Southwark, London and wrote a pamphlet, Over the River (1887) about her experiences there.
Lady Gregory continued to write prose during the period of her marriage. During the winter of 1883, while her husband was in Ceylon, she worked on a series of memoirs of her childhood home with a view to publishing them under the title An Emigrant's Notebook, but this plan was abandoned. She also wrote a number of short stories in the years 1890 and 1891, although these also never appeared in print. A number of unpublished poems from this period have also survived. When Sir William Gregory died in March 1892, Lady Gregory went into mourning and returned to Coole Park where she edited her husband's autobiography, which she published in 1894. She was to write later "If I had not married I should not have learned the quick enrichment of sentences that one gets in conversation; had I not been widowed I should not have found the detachment of mind, the leisure for observation necessary to give insight into character, to express and interpret it. Loneliness made me rich - 'full', as Bacon says."
Towards the end of 1894, encouraged by the positive reception of the editing of her husband's autobiography, Lady Gregory turned her attention to another editorial project. She decided to prepare selections from Sir William Gregory's grandfather's correspondence for publication as Mr Gregory’s Letter-Box 1813–30 (1898). This entailed researching Irish history of the period, and one outcome of this work was a shift in her own position from the 'soft' Unionism of her earlier writing on Home Rule to a definite support of Irish nationalism and Republicanism and what she was later to describe as "a dislike and distrust of England".
Edward Martyn was a neighbour of Lady Gregory, and it was during a visit to his house in Tulira that she first met W. B. Yeats. Discussions between the three of them over the following year or so led to the founding of the Irish Literary Theatre in 1899. Lady Gregory undertook fundraising, and the first programme consisted of Martyn’s The Heather Field and Yeats's The Countess Cathleen. During this period, she effectively co-authored Yeats's early plays, including The Countess Cathleen, specifically working on the passages of dialogue involving peasant characters.
The Irish Literary Theatre project lasted until 1901, when it collapsed due to lack of funding. In 1904, Lady Gregory, Martyn, Yeats, John Millington Synge, Æ, Annie Elizabeth Fredericka Horniman and William and Frank Fay came together to form the Irish National Theatre Society. The first performances staged by the society took place in a building called the Molesworth Hall. When the Hibernian Theatre of Varieties in Lower Abbey Street and an adjacent building in Marlborough Street became available, Horniman and William Fay agreed to their purchase and refitting to meet the needs of the society.
On 11 May 1904, the society formally accepted Horniman's offer of the use of the building. As Horniman was not normally resident in Ireland, the Royal Letters Patent required were paid for by her but granted in the name of Lady Gregory. One of her own plays, Spreading the News was performed on the opening night, 27 December 1904. At the opening of Synge's The Playboy of the Western World in January 1907, a significant portion of the crowd rioted, causing the remainder of the performances to be acted out in dumbshow. Lady Gregory did not think as highly of the play as Yeats did, but she defended Synge as a matter of principle. Her view of the affair is summed up in a letter to Yeats where she wrote of the riots; "It is the old battle, between those who use a toothbrush and those who don't.
Lady Gregory remained an active director of the theatre until ill health led to her retirement in 1928. During this time she wrote more than 19 plays, mainly for production at the Abbey. Many of these were written in an attempted transliteration of the Hiberno-English dialect spoken around Coole Park that became widely known as Kiltartanese, from the nearby village of Kiltartan. Her plays, which are rarely performed now, were not particularly popular at the time. Indeed, the Irish writer Oliver St John Gogarty once wrote "the perpetual presentation of her plays nearly ruined the Abbey". In addition to her plays, she wrote a two volume study of the folklore of her native area called Visions and Beliefs in the West of Ireland in 1920. She also played the lead role in three performances of Cathleen Ni Houlihan in 1919.
During her time on the board of the Abbey, Coole Park remained her home and she spent her time in Dublin staying in a number of hotels. In these, she ate frugally, often on food she brought with her from home. She frequently used her hotel rooms to interview would-be Abbey dramatists and to entertain the company after opening nights of new plays. She spent many of her days working on her translations in the National Library of Ireland. She gained a reputation as being a somewhat conservative figure. For instance, when Denis Johnston submitted his first play Shadowdance to the Abbey, it was rejected by Lady Gregory and returned to the author with "The Old Lady says No" written on the title page. Johnson decided to rename the play, and The Old Lady Says 'No' was eventually staged by the Gate Theatre in 1928.
When she retired from the Abbey board, Lady Gregory returned to live in Galway, although she continued to visit Dublin regularly. The house and demesne at Coole Park had been sold to the Irish Forestry Commission in 1927, with Lady Gregory retaining life tenancy. Her Galway home had long been a focal point for the writers associated with the Irish Literary Revival and this continued after her retirement. On a tree in what were the grounds of the now demolished house, one can still see the carved initials of Synge, Æ, Yeats and his artist brother Jack, George Moore, Sean O'Casey, George Bernard Shaw, Katharine Tynan and Violet Martin. Yeats wrote five poems about or set in the house and grounds: "The Wild Swans at Coole", "I walked among the seven woods of Coole", "In the Seven Woods", "Coole Park, 1929" and "Coole Park and Ballylee, 1931".
The woman Shaw once described as "the greatest living Irishwoman died at home at the age of 80 from breast cancer, and is buried in the New Cemetery in Bohermore, County Galway. The entire contents of Coole Park were auctioned three months after her death and the house demolished in 1941. Lady Gregory's plays fell out of favour after her death and are now rarely performed. She kept diaries and journals for most of her adult life, and many of these have been published since her death. They are a rich source of information on Irish literary history for the first three decades of the 20th century and her diaries covering the period of the founding of the Abbey are the only extant contemporary record of these events written by a major participant.