Elizabeth Jolley was born in Birmingham, in the industrial midlands of England, in 1923, the daughter of an English father and a Viennese mother. Until the age of eleven she was educated privately at home, then attended a Quaker boarding school and did nursing training in London where she experienced not only the effects of war on the wounded soldiers but also some aspects of institutional life. This experience, as well as the family tensions caused by the pacifist values of her father and the sense of exile felt by her mother, provided much of the material of Jolley's later fiction. In 1959 she emigrated to Australia with her husband and their three children. She worked in various fields, for instance as a nurse, a domestic cleaner, a door-to-door salesperson, and her often rather eccentric characters reflect her keen observation of the human condition gathered in such jobs.
Jolley wrote for twenty years before her first novel was published (constantly keeping notebooks and drafts).With the publication of Miss Peabody's Inheritance and Mr Scobie's Riddle (both 1983) her recognition and reputation immediately soared. Since then a considerable number of her novels and short stories have been published in Australia and overseas, many of them winning prestigious literary awards. Some have been turned into plays or films (most notably The Well; see also the film based on her life, The Night Belongs to the Novelist). A collection of her autobiographical pieces, speeches and articles was published under the title Central Mischief (1992).
Jolley taught creative writing at various tertiary institutions from the 1970s and was made a Professor of Creative Writing at Curtin University (Perth) in 1998. She received honorary doctorates from Curtin University, Macquarie University, University of NSW and the University of Queensland and in 1998 was named one of Australia's 100 National Living Treasures.
In keeping with her close appreciation of nature and the land, Jolley cultivated a farm with an orchard in Wooroloo near Perth. It burned down in bushfires in the late 1990s. In August 2002 she was admitted to a nursing home near her family home in Perth.