He was son of August Wilhelm Freiherr Stillfried von Rathenitz (d. 1806) and Maria Anna Johanna Theresia Walburge Gräfin Clam-Martinitz (1802–1874).
After leaving his military career, Stillfried moved to Yokohama, Japan and opened a photographic studio called Stillfried & Co. which operated until 1875. In 1875, Stillfried formed a partnership with Hermann Andersen and the studio was renamed, Stillfried & Andersen (also known as the Japan Photographic Association). This studio operated until 1885. In 1877, Stillfried & Andersen bought the studio and stock of Felice Beato. In the late 1870s, Stillfried visited and photographed in Dalmatia, Bosnia, and Greece. In addition to his own photographic endeavours, Stillfried trained many Japanese photographers. In 1886, Stillfried sold the majority of his stock to his protégé, the Japanese photographer Kusakabe Kimbei, he then left Japan.