A member of the well-known Sri Lankan Bandaranaike family, Yasmine Gooneratne was born in Colombo, Sri Lanka. She obtained a Bachelor of Arts (Hons) degree from the University of Ceylon and a Doctor of Philosophy degree from Cambridge University, both in English Literature. In 1953, she won the Senkadagala Memorial Prize for Original Verse. Her professional activities include university professor, literary critic, editor, biographer, bibliographer, novelist, essayist, short story writer and poet.
She first started publishing fiction in Sri Lanka before she was married. Having such a well-known name she was anxious to have her published stories assessed on their merits rather than on her presumed political affiliations, so to conceal her identity as completely as possible, she chose a male pseudonym, Tilak Gunawardena, for her earliest fiction.
She taught English literature at the University of Ceylon 1959-1972, and on emigrating to Australia in 1972 took up a position in the School of English and Linguistics at Macquarie University, Sydney, which conferred its first higher doctoral degree, Doctor of Letters (DLitt), on her in 1981. She was founding Director of the University's Post-Colonial Literatures and Language Research Centre from 1989-1993. She was awarded an AO (Officer in the General Division) in the 1990 Queen's Birthday Honours List for her distinguished contribution to Sri Lankan and Australian literature. In 1990 she was invited to become the Patron of the Jane Austen Society of Australia and is a Trustee of the Pemberley Foundation, Sri Lanka. She has acted as Vice-President of the Federation Internationale des Langues et Litteratures Modernes and as an Executive Committee Member of the NSW Writers Centre, Sydney. In 1991 she received a Writer's Fellowship from the NSW Ministry for the Arts and worked at Varuna Writer's Centre to complete A Change of Skies, which subsequently won the 1992 Marjorie Barnard Literary Award of Fiction. Since 1995, she has had positions on both the Australia Abroad Council and the Visiting Committee of the Faculty of Creative Arts at the University of Wollongong.
She has contributed literary articles, short stories, poetry and other writings to a wide range of journals and anthologies. Her critical works include studies of Jane Austen, Alexander Pope and Ruth Prawer Jhabvala. She has written two novels, several volumes of poetry, edited a collection of short stories from Sri Lanka and a collection of poems from India, Malaysia, Sri Lanka and Singapore, and edited the periodical New Ceylon Writing (1970-). She has also written about Sri Lanka and its personalities, including her family history Relative Merits: A Personal Memoir of the Bandaranaike Family of Sri Lanka. Her principal research interests are in eighteenth-century and Romantic literature, in modern English literature of Asia, in postcolonial literature, film and fiction, and in biography.
Gooneratne has read at many forums including at the Harold Park Hotel, Sydney, 1989, 1990 and 1991; the University of Canterbury, Kent, 1990; Wollongong University, NSW, 1990; "Katherine's Place", Perth, 1991; Macquarie University, Sydney, 1990 and 1991; Universities of Michigan, USA and New Brunswick, Canada, 1991, and Edith Cowan University, Perth, 1991. A Change of Skies and The Pleasures of Conquest were shortlisted for the Commonwealth Writers Prize in 1991 and 1995 respectively. In 2002 she received the 2002 Raja Rao Award from the Samvad India Foundation, an international prize instituted to honour writers and scholars who have made an outstanding contribution to the literature of the South Asian diaspora.
In December of 1996 she donated her papers to the National Library of Australia as part of the Australian Manuscripts Archive.