Born in Aberdeen, Gill was educated at Marischal College and Aberdeen University. He was in charge of the Earl of Crawford's private observatory at Dunecht before becoming royal astronomer at the Cape of Good Hope, where he remained until 1907. He was knighted in 1900.

Gill spent much time and thought on improving the accuracy of the astronomical unit (AU – the mean distance between the Earth and the Sun, one of the basic measurements of astronomy), then determined from measurements of the distances of Venus and Mars. In 1874 he went to Mauritius to observe the transit of Venus. The difficulty is that Venus, on magnification, presents a disk whose edges are not absolutely sharp, thus making it difficult to estimate the moment of first contact. In 1877 Gill went to Ascension Island to measure the distance of Mars using the distance from Greenwich as a base line. Although he obtained reasonable results he realized (as had Johann Galle) that a more accurate figure could be obtained if the planetoids were used instead for they came closer to the Earth and on magnification presented a starlike appearance. (This idea was taken up with great success later by Harold Spencer Jones.) In 1897, with the cooperation of astronomers in Leipzig and New Haven, Gill made a very accurate determination of the solar parallax.

His other main research was extending Friedrich Argelander's catalog to the southern skies. This began in 1882 when he photographed a comet and was impressed with the clarity of the stars visible in the background. Consequently he started photographing the southern skies, collaborating with the Dutch astronomer Jacobus Kapteyn. In 1904 the Cape Photographic Dorchmusterung was published cataloging over 450,000 stars to within 19° of the southern celestial pole.