Lisa Eva Nandy was born in Manchester on 9 August 1979, the daughter of The Hon Louise Nandy (née Byers) and Dipak Nandy, from India. Her grandfather Frank Byers was a Liberal MP who held many offices in the Liberal Party, later being created a life peer. Nandy grew up both in Manchester and in Bury, where her family subsequently moved.
She was educated at Parrs Wood High School, a mixed comprehensive school in East Didsbury in Manchester, followed by Holy Cross College in Bury. She studied politics at Newcastle University, graduating in 2001, and obtained a master's degree in public policy from Birkbeck, University of London.
She worked as a researcher and caseworker for the Labour MP Neil Gerrard. After that, Nandy worked in the voluntary sector as a researcher at the homelessness charity Centrepoint from 2003 to 2005, and then as senior policy adviser at The Children's Society from 2005 until her election in 2010, where she specialised in issues facing young refugees, also acting as adviser to the Children's Commissioner for England and to the Independent Asylum Commission. She served as a Labour councillor for the Hammersmith Broadway ward in Hammersmith and Fulham from 2006 to 2010. As a councillor, she served as shadow cabinet member for housing.
Nandy was selected as the Labour parliamentary candidate for Wigan constituency in February 2010 from an all-women shortlist. Elected to parliament on 7 May 2010, she became the constituency's first female MP and one of the first Asian female MPs.
She was appointed to the Education Select Committee in July 2010 and was appointed Parliamentary Private Secretary to Tessa Jowell, the shadow olympics minister, in October 2010. In 2012, she was made shadow children's minister. In October 2013, she was appointed shadow charities minister.
Following Labour's general election defeat in May 2015 and Ed Miliband's subsequent resignation as party leader, there was some speculation in the media that Nandy would stand in the leadership election. Nandy declined and endorsed Andy Burnham. In August 2015, Owen Jones said that he encouraged Nandy to run for the leadership, but the recent birth of her son prevented it. Nandy was also mentioned as someone who could replace Jeremy Corbyn as leader before the 2017 general election, and after the 2019 general election in the 2020 Labour Party leadership election.
In September 2015, it was announced that Nandy had been appointed to serve as shadow energy secretary in the Shadow Cabinet. Along with many colleagues, she resigned from her post in June 2016. In the wake of the these resignations, Nandy was approached by Labour MPs who wanted her to stand against Jeremy Corbyn in a leadership election. MPs felt that Nandy and eventual candidate Owen Smith were soft left politicians who could win the leadership. Nandy declined to stand and instead served as co-chair of Smith's campaign team.
After the election resulted in Corbyn's re-election, Nandy announced that she did not intend to return to the frontbench without the re-introduction of Shadow Cabinet elections, which had been abolished by Ed Miliband in 2011 (the last election being held in 2010). She also spoke of the abuse she had received for not supporting Corbyn, which she described as leaving her "genuinely frightened". She compared her treatment to that which she had received at the hands of the far-right when she first campaigned to become MP for Wigan in 2010.
In 2018, Nandy set up the Centre for Towns, a think tank focused on towns.