Hernandez grew up in Oxnard, California, in a family of five brothers and one sister. He was exposed to comic books early in life through his mother, who passed on her love of the medium to her children. He was particularly enamored with the work that Jack Kirby and Steve Ditko produced for Marvel Comics, as well as Hank Ketcham's Dennis the Menace and the Archie comics line. His brother Mario was responsible for introducing Gilbert to the underground comix movement when he smuggled a copy of Zap Comix into the house. Another big influence on Hernandez's work has been rock music, including punk, new wave and glitter rock. In particular, the "Brothers Hernandez" were influenced by the energy and diversity of the late 70's California punk and hardcore scene. Hernandez has credited punk rock with giving him the confidence to start drawing his own comics.

In the early 1980s, both Jaime and Gilbert created flyer and cover art for local bands. He also did the cover artwork for the record Limbo by Throwing Muses. The alternative rock band Love and Rockets was named after the Hernandez brothers' comic book.

The first wider recognition of Gilbert and his brothers' work occurred in 1982, after they had sent in a copy of their Love & Rockets comic, which up to that point they had been self publishing, to the Comics Journal, the foremost U.S. magazine of news and criticism pertaining to comic books and strips. This led to their work being published by the then just established Fantagraphics books. Between 1996 and 2001, the Love & Rockets series was temporarily suspended, while each brother, including Gilbert, pursued solo projects. During this time Gilbert created New Love, Luba, and Luba's Comics and Stories. After its resumption, Love & Rockets continued to be published by Fantagraphics on an annual basis. In 2009, Gilbert published The Troublemakers, his second solo graphic novel with the publisher, inspired by pulp novels and heist films. This has continued a trend he started with Chance in Hell and Speak of the Devil; all three books are faux adaptations of fictional B-movies.

Gilbert's main work is Palomar, a story about the inhabitants of small fictional village of the same name, located somewhere in Central America. Other well known titles with significant contributions from Gilbert include Music for Mechanics (1985), Tears from Heaven (1988), House of Raging Women (1988) and Heartbreak Soup (2007). He has also published several titles with other publishers, such as Dark Horse Comics, Titan Books and Vertigo Comics. Since 2008 he has moved away from his old characters and explored new themes.

The style of Gilbert's work has been described as magic realism or as "magic-realist take on Central American soap opera". A common theme is the portrayal of independent women, and their strength, with the main example being Luba of Palomar. His stories often deal with issues relevant to Latino culture in the United States. According to Dominican-American writer and MIT creative writing professor Junot Díaz, Gilbert Hernandez ideally would be considered "one of the greatest American storytellers".

Along with his brother Jaimie, Gilbert has been named as one of Time Magazine’s "Top 100 Next Wave Storytellers" in 2009. He is also co-creator and co-star (with his wife, Carol Kovinick) of The Naked Cosmos, an eccentric low-budget TV show about a cosmic prophet known as Quintas.