Josephine Dillon was born in 1884 in Denver, Colorado to Judge Henry Clay Dillon (died April 6, 1912, Los Angeles, California) and Florence Dillon (née Hood). She was the younger sister of opera singer Enrica Clay Dillon. Per the U.S. Census of 1900, Josephine's family was living in Long Beach, California, and she had four sisters and one brother living at home with her and her parents along with her maternal grandmother, Maria Hood, and a servant named Yick Leong.
Dillon was educated in the California public school system and graduated from Stanford University in 1908. After graduating from Stanford, Dillon studied acting in Italy for one year before returning to the United States to act on Broadway for actor Edward Everett Horton's stock company in New York City.
According to her United States passport application dated December 27, 1918, she was then employed as an actress, her father was deceased, and she had one brother, James D. Dillon, who was serving in the 158th Infantry, and Josephine was planning a humanitarian war relief trip to Turkey with the American Committee for Armenian and Syrian Relief based in New York City. Her passport application goes on to describe her as being 5' 6.5" tall with dark brown hair and hazel eyes.
Sometime after returning to the United States from her trip to Turkey, Dillon moved up the Pacific Coast from California to Oregon where she founded the Astoria Stock Company.
During her time in Portland, she met her future husband, actor Clark Gable, while she was working as a stage director for the Red Lantern Players. Initially, she was Gable's acting coach and patron (paying to have his teeth fixed, hair groomed, and so on.) Dillon moved to Hollywood, California in 1924 with Gable following after her, and they were married on December 12, 1924.
Upon arrival in Hollywood, Dillon opened The Dillon Stock Company and Gable began enjoying small successes in the film industry. Dillon and Gable divorced on April 1, 1930, after six years of marriage., and he married Texas socialite Maria "Ria" Franklin Prentiss Lucas Langham days later. Although, it has been alleged that she first divorced him in Mexico in 1929, but the divorce was not legally recognized.
Dillon authored Modern Acting, which describes in detail the training that she put Gable through over a 6.5 year period. She also taught Errol Flynn, Gary Cooper and Cary Grant.
Little is known of the rest of Dillon's life after her divorce from Gable although she did appear in two films at the age of 60 in 1944. Dillon was seventeen years Gable's senior at the time of their marriage. It has been alleged by some that Gable insisted that their marriage was never consummated, and it has been further asserted that Gable owned the house in which she lived (located at 12746 Landale St. in North Hollywood, California) until his death in 1960, at which time the residence was left to her in his will.
While the U.S. Census of 1900 as well as her death certificate lists her year of birth as 1884, Dillon's passport application lists her year of birth as 1886. She died in 1971, aged 87, and was interred at Calvary Cemetery, East Los Angeles, California (plot at Section C, Lot 80, Grave 4)