She was born in Glossop, Derbyshire, the eldest of three children, and was brought up in the Derbyshire mill village of Hadfield, attending the local Roman Catholic primary school. Her parents, Margaret and Henry Thompson, were both born in England, of Irish descent. After losing touch with her father at age eleven, she took the name of her stepfather, Jack Mantel. Her family background, the mainspring of much of her fiction, is explained in her memoir, Giving Up the Ghost.

Mantel attended Harrytown Convent in Romiley, Cheshire (now Romiley, Greater Manchester. In 1970 she began her studies at the London School of Economics to read law. She transferred to the University of Sheffield and graduated as Bachelor of Jurisprudence in 1973. After university, she worked in the social work department of a geriatric hospital, and then as a saleswoman. In 1974 she began writing a novel about the French Revolution, which was later published as A Place of Greater Safety.

In 1977 she went to live in Botswana with her husband, Gerald McEwen, a geologist, whom she had married in 1972. Later they spent four years in Jeddah in Saudi Arabia — a memoir of this time, Someone to Disturb, has been published in the London Review of Books. Leaving Jeddah gave her the feeling that it was "the best day of my life". During her twenties she suffered from a debilitating and painful illness. This was initially diagnosed as a psychiatric illness for which she was hospitalised and treated with anti-psychotic drugs. These produced a paradoxical reaction of psychotic symptoms and for some years she refrained from seeking help from doctors. Finally, in Africa, and desperate, she consulted a medical text-book and realised she was probably suffering from a severe form of endometriosis, a diagnosis confirmed back in London. The condition and necessary surgery left her unable to have children and continued to disrupt her life, with continued treatment by steroids radically changing her appearance. She was patron of the Endometriosis SHE Trust.

Her first novel, Every Day is Mother's Day, was published in 1985, and its sequel, Vacant Possession, a year later. Returning to England, she became the film critic of The Spectator and a reviewer for a number of papers and magazines in Britain and the US. Her novel Eight Months on Ghazzah Street, which drew on her first-hand experience in Saudi Arabia, uses the dangerous clash of values between the neighbours in a stifling city apartment block to illustrate the tensions between Islam and the liberal west. Her Winifred Holtby Memorial Prize-winning novel Fludd is set in 1956 in a fictitious northern village called Fetherhoughton, and centres on the convent and Roman Catholic church, where a mysterious stranger brings about alchemical transformation in the lives of the downtrodden, the depressed and the despised.

A Place of Greater Safety, published in 1993, won the Sunday Express Book of the Year award, for which her two previous books had been shortlisted. A long novel written with a close eye on historical accuracy, it traces the career of three revolutionaries, Danton, Robespierre and Camille Desmoulins, from childhood to their early deaths during the Terror of 1794.

A Change of Climate Set in rural Norfolk it describes the life of Ralph and Anna Eldred, raising their four children and devoting their lives to charity, but includes chapters from their early married life as missionaries in South Africa, imprisonment, subsequent deportation to Bechuanaland and the tragedy that occurred there.

An Experiment in Love, which won the Hawthornden Prize, takes place over two university terms in 1970, and follows the progress of three girls — two friends and one enemy — as they leave home for university in London. Mrs Thatcher makes a cameo appearance in a novel that explores women’s appetites and ambitions and suggests how they are often thwarted. Though Mantel has used material from her own life, it is not an autobiographical novel. Her next book, The Giant, O’Brien, is set in the 1780s and is based on the true story of Charles O’Brien or Byrne, who came to London to exhibit himself as a freak and whose bones hang today in the Museum of the Royal College of Surgeons. The novel treats O’Brien and his antagonist, the Scots surgeon John Hunter, less as characters in history than as mythic protagonists in a dark and violent fairytale, necessary casualties of the Age of Enlightenment. Mantel adapted the book for BBC Radio Four, in a play starring Lloyd Hutchinson as the Giant, Alex Norton as John Hunter, and Frances Tomelty and Deborah Finley as two of the women who cross their path.

In 2003 Mantel published her memoir, Giving Up the Ghost, which won the MIND ‘Book of the Year’ award, and in the same year brought out a collection of short stories, Learning To Talk. All the stories deal with childhood and, taken together, the books show how the events of a life are mediated into fiction. Her 2005 novel, Beyond Black, was shortlisted for the Orange Prize. Set in the years around the millennium, it features a professional medium, Alison Hart, whose calm and jolly exterior conceals grotesque psychic damage, and who trails around with her a troupe of ‘fiends’ who are invisible but always on the verge of becoming flesh.

Some comparison has been made between Mantel's work and that of Muriel Spark.

Mantel was appointed Commander of the Order of the British Empire (CBE) in the 2006 Birthday Honours.

The long novel Wolf Hall, about Henry VIII’s minister Thomas Cromwell, was published in 2009 to high critical acclaim. The book went on to win that year's Man Booker Prize and upon winning the award, Mantel stated, "I can tell you at this moment I am happily flying through the air". Judges voted three to two in favour of Wolf Hall for the prize, with Mantel being presented with a trophy and a £50,000 cash prize during an evening ceremony at the London Guildhall. The panel of judges, led by the broadcaster James Naughtie, described Wolf Hall as an "extraordinary piece of storytelling". Leading up to award, the book was backed as the favourite by bookmakers and accounted for 45% of all the nominated books' sales. By winning, it subsequently became the first favourite to win the award since 2002.

Mantel has begun work on the sequel to Wolf Hall, which she plans to title The Mirror and the Light; she added, "What I have got at the moment is a huge box of notes." She is working on a short non-fiction book called The Woman Who Died of Robespierre, about the Polish playwright Stanis?awa Przybyszewska. Mantel also writes reviews and essays, mainly for The Guardian, the London Review of Books and the New York Review of Books.