She was born in Grimsby. She started drawing as a child with the encouragement of her parents, who recognised her talents and thought that she might become an artist. However when she left school, she joined Felixstowe Repertory theatre as an actress. When the Second World War broke out she joined the British film industry to make educational films. Later in the War she moved to doing support work for the police and it was while working for them that she first thought of Pookie, the winged rabbit.
While working in a police station during the war, manning a police switchboard, she doodled a picture of a fairy sitting on a toadstool with a little rabbit in front. She then decided that fairies were "two a penny" and so rubbed out the fairy and gave the rabbit wings. After naming the rabbit Pookie she wrote a story about him: "This is the story of Pookie, a little white furry rabbit, with soft, floppity ears, big blue eyes and the most lovable rabbit smile in the world," were the opening lines.
So confident was she that in 1946 Ivy took a train from Grimsby to London and arrived at the offices of the publishers Collins without a prior appointment. But the response was less than encouraging and she returned home crestfallen, leaving her manuscript behind.
A few weeks later she was contacted by William Hope Collins and asked to attend the Glasgow office where the Children's book section was based. Not only did William accept the book he also fell in love with its author. Their relationship met with strong disapproval because William was married with children. But in 1950 Ivy and William were married and went to live near Biggar in the Scottish Borders. They had two daughters, Heather (b.1952) and Cherry (b.1956). She gave up writing upon the death of her husband in 1967 and Collins eventually stopped publishing the books. However they were revived in 1994 when Ivy and her daughters re-printed the stories for their own publishing company.
In 1997 Ivy Wallace was the subject of a documentary on BBC Scotland and an exhibition of her drawings was held in Glasgow during that same year
In addition to the Pookie books she wrote two other series, one of which, The Animal Shelf, was later adapted for television and released as 13 animated episodes.