Alison Lester was born at Foster, Victoria. Raised on a farm, she was educated at St. Margaret's in Berwick, Victoria, where she was a boarder. She trained as a Secondary Arts and Crafts teacher, with a Higher Diploma in Teaching from Melbourne Teachers' College, and taught for some time.
Lester began illustrating books in the late 1970s, and for much of the early 1980s, she concentrated on illustrating books by other writers such as Robin Klein (especially the Thing series) and June Epstein (especially the Augustus series). In 1985, she published the first work that she had both written and illustrated: Clive Eats Alligators. Since then, she has continued to illustrate the work of other authors, but has increasingly illustrated her own works.
In her works, Alison Lester injects romance, adventure and imagination into the everyday world of pre-school children - their likes/dislikes, meal-times, getting dressed, playing, shopping, sleeping. Her childhood on the family cattle farm is apparent as inspiration in many of her books.
Many of Lester's books have been translated into other languages and taught in universities across Australia. Many have been short-listed and received awards including the Children's Book Council of Australia Book of the Year, Australian Multicultural Children's Literature, and Australian Book Publishers Association Design Awards. She has twice been nominated for the prestigious Astrid Lindgren Memorial Awarial, and has won the Dromkeen Medal.
From 2011 to 2013, Lester was the inaugural Australian Children's Laureate, for the Australian Children's Literature Alliance. In 2015 to 2016, she produced works in association with the Indigenous Literacy Foundation, workshopping stories with children in schools across Australia: the subsequent books included No Way Yirrikipayi! (with Milikapita School) and Kunbarlanja Kunbolk (with Gunbalanya School).
In 2016, Allen & Unwin published Alison Lester’s Wonderful World, a colouring book for children aged five to eighteen.