Molly Kelly was born Molly Craig at Jigalong, in the Pilbara region of Western Australia. Molly Craig, fourteen years old, her eight year old sister Daisy and their eleven year old cousin Gracie Fields were removed from their Aboriginal family and placed in the Moore River Native Settlement near Perth, on the orders of Auber Octavius Neville, the Chief Protector of Aborigines for Western Australia. Taking her sister and cousin with her, Craig escaped and walked sixteen hundred miles across the desert to return home. The journey undertaken by the three girls in 1931 inspired Craig's daughter Doris Pilkington Garimara to write the biography, Follow the Rabbit-Proof Fence (1996).
Upon returning home, Craig was trained as domestic help on Balfour Downs station where she married Toby Kelly to whom she had two daughters Doris and Annabelle. On 18 November 1940, after having undergone treatment for appendicitis, Craig was discharged from Royal Perth Hospital and was once again transported through Ministerial Warrant to Moore River Native Settlement. On 1 January 1941, after being denied permission to travel back to Jigalong to mourn family members, Craig again absconded from Moore River. She managed to take Annabelle with her but had to leave Doris behind. In the mission, Craig was beaten for speaking her native language and was not reunited with Doris Pilkington Garimara until 1962.