Olsen was born in Sherman Oaks, California, the daughter of Jarnette (née Jones), a personal manager, and David Olsen, a real estate developer and mortgage banker. Olsen graduated from Campbell Hall School in 2007, and from the Tisch School of the Arts and the Atlantic Theater Company.
Olsen made her film debut in Martha Marcy May Marlene. an independent film drama about a young woman who comes out of a cult and tries to live a normal life with her sister and brother-in-law. She has also acted in The Silent House, in which she played the role of Sarah, and appeared in the music video "The Queen" by Carlotta. As of mid-2011, she was filming the movie Red Lights, which is due to be released in 2012. She is set to star in Liberal Arts, scheduled for release in 2012. She and Dakota Fanning are set to star in Very Good Girls, planned for a 2013 release. Olsen almost quit acting in 2004 because of Mary-Kate's eating disorder. As a child she took ballet lessons and she auditioned for Spy Kids. Elizabeth was nominated for Breakthrough Award and Best Ensemble Cast for her movie Martha Marcy May Marlene.
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