Lydia Forsström was born in Russia; her parents were Finland Swedes. The family moved to Berlin after the Russian revolution. Forsström was a devout Protestant. In 1933 she graduated from Berlin’s Luisen high school, where she had formed a trusting relationship with her religious studies teacher Elisabeth Schmitz. The two women joined a small circle opposing the National Socialists at the school. They supported endangered Jewish acquaintances throughout the Nazi era, including providing secret help for people in hiding.
In 1941 Forsström began studying Slavistics in Berlin. She was a member of the Confessional Church and lived with Elisabeth Schmitz. In 1943 the two of them hid the persecuted kindergarten teacher Liselotte Pereles. After their building was bombed in the fall of 1943, Forsström continued her studies in Heidelberg, also supporting Jewish friends there.
Lydia Forsström and Elisabeth Schmitz remained friends after the war. Forsström soon moved to Stockholm, where she ran a nursing school. She remained unmarried and returned to Germany on her retirement. The Israeli Holocaust memorial center Yad Vashem honored her as Righteous Among the Nations in 1980.