Mudrooroo was born at East Cubelling (near Narrogin) in Western Australia. At the age of nine he was placed in a Catholic orphanage, where he lived until he was sixteen. He spent a year in Fremantle Prison, then lived for a time in the home of Mary Durack (q.v.). She was later to write the foreword to his novel, Wild Cat Falling, published in 1965 and accclaimed as the first novel by an Indigenous Australian.
After moving to Melbourne in 1958, he travelled in Thailand, Malaysia and India. He spent some years in India as a Buddhist monk, then returned to work at Monash University and study at Melbourne University. In 1988, he changed his name from Colin Johnson to Mudrooroo.
In the 1990s he held a number of academic positions, which often involved teaching courses in Aboriginal literature. These positions included Visiting Associate Professor at Bond University, Lecturer at the University of Queensland, and Tutor and Writer-in-Residence at Murdoch University. Active in promoting Aboriginal culture in the wider community, Mudrooroo co-founded the Aboriginal Writers, Oral Literature and Dramatists' Association with Jack Davis (q.v.), and has also served on the Aboriginal Arts Unit committee of the Australia Council.
In 1996 a controversy arose over Mudrooroo's public identification as an Indigenous Australian. His sister revealed that she had conducted genealogical research that found no trace of Aboriginal ancestry in the family. Extensive debate ensued about the issues of authenticity and what constitutes Aboriginal identity.
After living for a time on Macleay Island off the coast of Brisbane, Queensland, Mudrooroo left Australia in 2001 to pursue further studies in Buddhism.