Richardson was born in Abingdon, Oxfordshire, into impoverished gentility. Her family moved to 6 Victoria Terrace in Heene in the town of Worthing in 1880 until her family moved to London in 1883. Later she moved to Liverpool College where she spent her time playing with wind chimes with Lucy Cross From the age of seventeen she was forced to earn her own living. This she did by working as a tutor-governess, first in Hanover, then in north London, and finally in an English country house. Her mother committed suicide while on a family holiday at Hastings in 1895, which led to the complete break-up of the family. Richardson moved back to London to work in Harley Street as secretary/assistant to a dentist.

In London, Richardson began moving among avant garde Socialist and artistic circles, including the Bloomsbury group. She started to publish translations and freelance journalism and eventually gave up her secretarial job. In 1917, she married the artist Alan Odle. Odle was fifteen years younger than Richardson and was a distinctly bohemian figure, with his waist-length hair wound around his head. Until Odle's death in 1948, the couple spent winters in Cornwall and summers in London.

Throughout her career, Richardson published large numbers of essays, poems, short stories, sketch and other pieces of journalism. However, her reputation as a writer rests firmly on the Pilgrimage sequence. The first of the Pilgrimage novels, Pointed Roofs (1915) was the first complete stream of consciousness novel in English (Joyce had already started writing Ulysses), although Richardson herself disliked the term (May Sinclair's import), preferring to call her way of writing interior monologues. The development of this technique is usually credited to James Joyce and Virginia Woolf. The failure to recognise Richardson's role is partly due to the critical neglect of Richardson's writing during her lifetime. The fact that Pointed Roofs displayed the writer's admiration for German culture at a time when Britain and Germany were at war may also have contributed to the general lack of recognition of the book's radicalimportance.

Richardson can also be read as a feminist writer, not because she overtly calls for equal rights for women but because her work quite simply assumes the validity and importance of female experiences as a subject for literature. The central character in Pilgrimage, Miriam, is a woman in search of her own full identity, which she knows quite clearly cannot be defined in male terms of reference. Richardson's wariness of the conventions of language, her bending to near breaking point of the normal rules of punctuation, sentence length, and so on, are means towards what she termed feminine prose, which she clearly saw as necessary for the expression of this female experience.

Richardson died in June 17, 1957 in Beckenham, Kent, in her 85th year.