Lidman was raised in the Västerbotten region of northern Sweden. She studied at the University of Uppsala where her studies were interrupted by her receiving tuberculosis. She achieved her first great success with the novel Tjärdalen (The Tar Still). In this novel and in Hjortronlandet she depicts themes like alienation and loneliness. In this and her following three novels, she described the difficult conditions for poor farmers in the northern Swedish province Västerbotten during the nineteenth century.

Her innovative style was influenced by dialects and biblical language.

In connection with her first four novels, she wrote a number of texts with strong political content. She engaged in protest against the Vietnam War (including traveling to North Vietnam and participating in the Russell Tribunal) and apartheid in South Africa. She also supported the miners strikes in North Sweden and was active in the Communist movement and after that in the environmentalist movement. After 1977, she wrote five additional novels that dealt with the colonization of northern Sweden.

She was awarded a number of prizes, including the Nordic Council's Literature Prize for her work Vredens barn.