Peter Carey was born in 1943 at Bacchus Marsh, Victoria. He was educated locally and at Geelong Grammar School before beginning a science degree at Monash University, Melbourne, in 1961. After a serious car accident he discontinued his studies and began work at an advertising agency where he met writers Barry Oakley and Morris Lurie. Carey wrote the first of several unpublished novels in 1964 and published a number of short stories before travelling in Europe between 1967-70.
After his return to Australia in 1970, Carey continued to work in advertising and wrote the stories that were collected in his first published book, The Fat Man in History (1974). During the 1970s he resided in Sydney and Yandina, an alternative community. The security of his work in advertising enabled him to pursue his experimental narratives, leading to the publication of Bliss which won a number of awards in 1982, including the Miles Franklin Award. Carey won the prestigious Booker Prize in 1988 for Oscar and Lucinda and collaborated on that novel's adaptation to film. In 1989 he moved to New York where he teaches creative writing and continues to work on his own writing projects. Carey's Jack Maggs (1997) and True History of the Kelly Gang (2000) have attracted more awards, indicating that his reputation in Australian literature is firmly established.
The blend of surrealism and realism in Carey's fiction has often been attributed to the influence of his reading of Gabriel Garcia Marquez's fiction. Carey's fabulism, while not simply derivative, employs an accessible prose style that has attracted many readers of fantasy and science fiction. Critics have shown that Carey's use of ambiguous narrators and other destabilising narrative techniques reveal the many contradictions of contemporary life.
Carey has had dual Australian-USA citizenship since 2002. In 2004 he was listed as one of Australia's 40 most influential people by the Australian newspaper.