Gustafson was born in Wyoming and moved to Montana in 1972.[1] She attended Montana State University on a skiing scholarship and graduated with honors in 1983.[1] She was named to the MSU Hall of Fame for her skiing accomplishments in college.[3] Gustafson obtained her Juris Doctor degree from the University of Montana Law School in 1988, again with honors.[4]
Gustafson worked as a staff attorney for the Social Security Administration for two years,[1] and entered private practice in 1991. In that period, she also was a public defender in Rosebud County, Montana. From 1996 to 2004, she was a managing partner at the law firm Graves, Toennis and Gustafson in Billings, Montana.[1]
She was appointed as District Judge of Montana's 13th Judicial District, which oversees Yellowstone County, by former Governor Judy Martz, and took the bench in 2004.[1] She succeeded retiring District Judge and former Montana Supreme Court justice Diane Barz.[1] She was re-elected to the bench in 2004, 2006 and 2012.[2][4] Gustafson started Yellowstone County's drug court in 2011.[4][5] This was Montana's first felony drug court.[6]
In 2017, she became the first justice appointed to the Montana Supreme Court rather than elected. She was chosen by Governor Bullock to replace Mike Wheat who retired effective December 31.[2] She then ran unopposed in 2018.[7] That election was for the remaining four years of Wheat's term.[8]
In 2022, Gustafson ran a costly campaign against James Brown, a Helena based attorney. The race ended up as having the most money ever spent in a Montana Supreme Court race.[9] Even though the election is non-partisan, special interest groups spent a significant amount of money on the race.[7] Montana Free Press reported $3 million spent by outside groups.[7] Montana Republican leaders supported Brown early in his campaign, setting the stage for an election with partisanship overtones.[10] Gustafson won with 54% of the votes. Brown blamed his loss on the "millions of dollars in liberal money" that had flooded the state in the final weeks of the race.[11][12]
As of 2024, she is Vice President of the Montana Judges Association.[4]