A lesbian who is beautiful, stylish, or markedly feminine. Also: lipstick. adj.
There are many L-words depicted in Showtime's newest drama "The L Word." It's set in Los Angeles. It explores loving relationships. But the l-word that strides above all others in this series is lesbians.
As a companion to "Queer as Folk," HBO's series about gay men, "The L Word" follows the lives of a group of lipstick lesbian friends living in Hollywood.
Rob Owen, "Lesbians in love," Pittsburgh Post-Gazette, January 16, 2004
To complicate things further, many lesbians argue that there are even important differences between lipstick lesbians and femme lesbians. "While femmes can pass as straight, most are really adamant about being known to be queer, while lipstick lesbians are often in the closet," says Femme magazine's Drinkwater. "While lipstick lesbian is a description of what someone looks like, femme is a deep and meaningful identity that someone claims. Being a femme is really about sexual and feminine power, and we just radiate femininity. I can spot a femme wearing no makeup and Birkenstocks. For femmes, femininity isn't something you play with or apply with makeup. It's at your core."
Benoit Denizet-Lewis, "Putting on a good face," The Bosotn Globe, March 2, 2003
"Hip-Deep in Alligators," a detective novel, is Chicago literature. Written by Robert Campbell, it is fabricated with the city's ethnicity, politics, thinking and, above all, languages. The detective is Jimmy Flannery, Chicago precinct captain and sewer inspector. ...The onetime supervisor now is back walking the sewers of Chicago, inspecting the brickwork because he supported the successful aldermanic candidate of Janet Canarias, "a lipstick lesbian," against the wishes of his boss and the machine.
Kenan Heise, "'Hip-Deep in Alligators' is pure Chicago," Chicago Tribune, December 7, 1987
I didn't bother returning last summer for my 10th Yale reunion because I still live part of each year in New Haven. I even thought I knew what was going on until Sara Cohen, class of '88, started talking about the "lipsticks" and the "crunchies." The former, she explains, are Yale's radical-chic lesbians; the latter, "the granola dykes who have old-fashioned utopian ideas about feminism." ...
When I met Ms. Cohen, a self-proclaimed lipstick, she wore a white silk Pierrot outfit with a black leather baseball cap, dead-white face powder, opaque sunglasses and magic-marker-red lipstick.
Julie V. Iovine, "'Lipsticks and Lords': Yale's New Look," The Wall Street Journal, August 4, 1987
A near-synonym for lipstick lesbian is femme lesbian (1988), although see example citation #2 for an explanation of the subtle differences between the two terms. I should also note in passing the acronym LUG lesbian until graduation which refers to women who experiment with lesbianism or bisexuality in college:
At some colleges, women feel free to experiment with the entire concept of sexual identity. At Smith College last year there was a "questioning" support group, for students who were wondering whether they were lesbians. There is even a new term "lugs," lesbians until graduation. Some of these women hide their sexual orientation on leaving college, fearing harassment. Some ultimately choose men.
Sara Rimer, "Campus Lesbians Step Into Unfamiliar Light," The New York Times, June 5, 1993