Spender was born in Newcastle, New South Wales, a niece of the crime writer Jean Spender (1901—70). The eldest of three, she has a younger sister Lynne, and a much younger brother Graeme. She attended the Burwood Girls High School, in Sydney. In her youthful days she was a Miss Kodak girl. In the later half of the 1960s she also taught English Literature at Dapto High School. A student recalls that she used to say "always marry for money". She started lecturing at James Cook University in 1974, before going to live for a while in London and publishing the book Man Made Language in 1980.

She is co-originator of the database WIKED (Women's International Knowledge Encyclopedia and Data) and founding editor of the Athene Series and Pandora Press, commissioning editor of the Penguin Australian Women's Library, and associate editor of the Great Women Series (United Kingdom).

She is the author of a witty literary spoof, The Diary of Elizabeth Pepys, 1991 Grafton Books, London, a feminist critique of women's lives in 17th Century London, purportedly written by Elisabeth, the wife of Samuel Pepys.

Today Spender is particularly concerned with intellectual property and the effects of new technologies: in her terms, the prospects for "new wealth" and "new learning". For nine years she was a director of Copyright Agency Limited (CAL) in Australia and for two years (2002—2004) she was the chair. She is also involved with the Second Chance Programme, which tackles homelessness among women in Australia.

She has been in a relationship with Ted Brown for over three decades. They have no children. She consistently dresses in purple clothes, a choice she initially made for its symbolic reference to the suffragettes. She currently resides in Brisbane, Australia.