The son of a Congregational minister from Morrison, Illinois, Millikan was educated at Oberlin, where he studied classics, and Columbia University, where he obtained his PhD in 1895. After a year in Europe, studying under Max Planck and Walther Nernst, he took up an appointment in 1896 at the University of Chicago, being promoted to a full professorship in 1910. Millikan moved to the California Institute of Technology in 1921 as director of the Norman Bridge Laboratory, a position he held until his retirement in 1945.

In 1909 Millikan started on a project that was to win for him the 1923 Nobel Prize for physics – the determination of the electric charge of the electron. His apparatus consisted of two horizontal plates that could be made to take opposite charges. Between the plates he introduced a fine spray of oil drops whose mass could be determined by measuring their fall under the influence of gravity and against the resistance of the air. When the air was ionized by x-rays and the plates charged, then an oil drop that had collected a charge would be either repelled from or attracted to the plates depending on whether it had collected a positive or negative charge. By measuring the change in the rate of fall and knowing the intensity of the electric field Millikan was able to calculate the charges on the oil drops. After taking many careful measurements he was able to come to the important conclusion that the charge was always a simple multiple of the same basic unit, which he found to be 4.774 ± 0.009 × 10^–10 electrostatic units, a figure whose accuracy was not improved until 1928. Millikan followed this with a prolonged attempt from 1912 to 1916 to demonstrate the validity of the formula introduced by Albert Einstein in 1905 to describe the photoelectric effect, work that was cited in Einstein's Nobel award.

In 1923 he began a major study of cosmic rays, first identified in 1912 by Victor Hess, which was to occupy him for the rest of his career. His first aim was to show that they did not originate in our atmosphere. To do this he devised an ingenious set of observations made at two lakes in the San Bernadino mountains of southern California. The lakes were many miles apart and differed by 6700 feet (2042 m) in altitude. The difference in altitude would have the same effect on intensity of cosmic rays as six feet of water. He found that the intensity of ionization produced by the incoming cosmic rays in the lower lake was the same as the intensity six feet deeper in the higher lake. This showed, he claimed, that the rays do come in definitely from above and that their origin is entirely outside the layer of atmosphere between the levels of the two lakes.

Millikan then went on to theorize about the nature of the cosmic rays. He argued that they were electromagnetic radiation photons, for if they were charged particles they would be influenced by the Earth's magnetic field and therefore more likely to arrive in higher rather than lower latitudes. Millikan had failed to detect any such effect with latitude. In fact Millikan's theories were soon disproved for Arthur Compton did detect a latitude effect.