Sister of former Premier of Tasmania Jim Bacon, Wendy Bacon was raised in Victoria, and educated at Presbyterian Ladies' College. She entered the University of Melbourne in the mid-1960s.
By the late 1960s, Bacon had moved to the University of New South Wales, where she edited the student newspaper Tharunka, and became involved with the Kensington Libertarians. During this period, she challenged to NSW's censorship laws (including distributing materials from the Little Red Schoolbook outside schools), activities that culminated in eight days' detention Mulawah Women's Prison for exhibiting an obscene publication.
After university, Bacon worked as an investigative journalist, focusing strongly on police corruption. Her series of articles on the failed bribery and attempted murder of policeman Michael Drury became the basis of ABC television series Blue Murder (1995). In 1984, she won a Walkley Award for a series of articles on police corruption in NSW.
Wendy Bacon has been Director of the Australian Centre for Independent Journalism. She teaches investigative journalism at the University of Technology, Sydney (UTS).