The 22-year-old Scot has risen 22 places in the world rankings in a year.
"I've wanted this since I was a kid and it's actually here and it's actually happening," she told BBC Scotland.
"I think it would be crazy to go in thinking there's no way possible for me to challenge for a medal. I'm 15th in the world."
Two years ago, Gilmour was asked what she wanted to achieve in the sport.
Her bold aim was to win a medal at all the major events - European, world championships, Commonwealth Games and Olympics - and she is halfway to realising her ambition.
A Commonwealth Games and a European Championships medal have already been chalked off the list.
Gilmour, who won a silver medal at this year's European Championships, believes she is going into the Olympics in the best shape of her life and in great form too.
"I've pushed these top guys to three sets, taken a couple of wins here and there," she said.
"It's a major championships and crazy things happen in major championships. So for me to say there's no chance is silly."
Gilmour is full of confidence at the moment, but after the Commonwealth Games in Glasgow, her new coach, two-time Olympian Chris Bruil, decided to overhaul her game and she admits she struggled.
"He stripped my game back to very basics and there were tears and there were broken badminton rackets, I'm not going to lie," she said.
Gilmour competed in lesser tournaments against weaker opponents in a bid to solidify what she had been working on in training.
It had the desired effect as she has risen up the world rankings to 15th from 37th this time last year.
While she is moving up in the world, she admits she is not feeling totally in awe at the prospect of competing on the Olympic stage.
That is also down to the fact that she was involved in the GB ambition programme for London 2012.
"That kind of wow factor and shock has been taken away a bit," she said.
"I got to go to London, soak in the atmosphere, even eat in the dining hall, which doesn't seem like a big thing.
"But, when you're faced with every food under the sun, and you have to control yourself, it's quite difficult."
Kirsty Gilmour realised a childhood dream after being named in the GB badminton team for the Rio Olympics and the Scot is targeting a medal.