Sarah Dawson graduated from Melbourne University in 1973 with an honours degree in English and French. After a brief period in the UK, she returned to Australia, where she began work with independent publisher Lloyd O'Neill.
Dawson's career as an editor was marked by project-driven moves between various publishers, though she also served, at one point, as managing editor for Penguin. Among her projects were her work as principal editor on The Penguin Working Words and the seminal Oxford Companion to Australian Literature.
Penguin publisher Bob Sessions said that Dawson was 'a book editor of exceptional ability - one of the two or three best editors of her generation ... She fostered warm, respectful relationships with her authors and many are in her debt because she helped them say better what they wanted to express.' (Bookseller + Publisher Magazine 90.8 (May 2011): 9)
Dawson was at one time married to Barrie Hughes (q.v).