Lohman was born and raised in Palm Springs, California, the daughter of Diane (née Dunham), a patisserie owner, and Gary Lohman, a Minnesota-born architect. She has one younger brother, Robert (born 1982). She has two cats, Monk and Clint. In high school, she had an A in all her school subjects except drama, because she was too shy. At age nine, she played Gretl in The Sound of Music at the Palm Desert's McCallum Theater. Two years later, she won the Desert Theater League's award for "Most Outstanding Actress in a Musical" for the title role in Annie. By the age of 17, Lohman had appeared in 12 different major productions and had been a backing singer for the likes of Frank Sinatra, Bob Hope and the Desert Symphony.
In 1997, after graduating from high school, Lohman moved to Los Angeles to pursue a screen acting career. For the next few years, her work consisted of science fiction B-movies (such as Kraa! The Sea Monster and Planet Patrol), television productions (including the television film Sharing the Secret) and children's films (such as Delivering Milo and The Million Dollar Kid). Also included was the dark urban drama White Boy.
Lohman starred in White Oleander, an adaptation of Janet Fitch’s novel, alongside Michelle Pfeiffer, Robin Wright Penn and Renée Zellweger and directed by Peter Kosminsky. Though the film was unsuccessful at the box office (it opened to $5.6 million in 1,510 theaters), it received generous reviews and her performance met with wide critical acclaim, being described as her "breakthrough role" by media sources.
The following year, Lohman appeared in Matchstick Men, directed by Ridley Scott, starring with Nicolas Cage and Sam Rockwell. And though it was not a box office success either, Lohman continued to receive critical praise. Later that year, she appeared in Tim Burton’s Big Fish, which continued her trend of appearing in acclaimed but commercially unsuccessful films.