After her father’s death in 1902, Laserstein and her family moved from Prussia to Danzig, now Gdansk, Polland; ten years later, they settled in Berlin. There, having received her initial art training in a school run by one of her aunts, Laserstein became one of the few female students at the prestigious Berlin Academy of Fine Arts, where she was enrolled from 1919 through 1925. Working with Erich Wolfsfeld, Laserstein became and accomplished realist painter, winning the Academy’s gold medal for her work. She soon had her own pupils, and her first solo exhibition in 1931 at Fritz Gurlitt's Gallery in Berlin garnered critical praise. Meanwhile, to supplement her income Laserstein took various jobs making decorative art and, most significantly, illustrating anatomy text.

Despite her increasing success, the rise of Nazism in Germany began to affect Laserstein’s life. Because her paternal grandfather had been Jewish, Laserstein’s mother’s apartment and many of her valuables were confiscated by the state; it became difficult for Laserstein to find artist’s materials, and in 1935 she was forced to close her studio and her art school. Fortunately, some years earlier a friend had introduced her to several Swedish art dealers who expressed an interest in handling her work. Therefore, in 1937 Laserstein moved to Sweden, where she remained for the rest of her life, first in Stockholm and from 1954 in Kalmar. Her sister Kate eventually joined her, but their mother died in Ravensbrück in 1943. Laserstein became a member of the Swedish Academy of Arts and developed a reputation as a popular and respected portraitist.