Merril was born in Boston. After her father's suicide during her grade-school years, her mother found a job at Bronx House and moved them to the borough of the Bronx in New York City. In her mid-teens, she pursued Zionism and Marxism.

In 1939, she graduated from Morris High School in the Bronx at 16, and rethought her politics under the influence of the Hitler-Stalin Pact. She married Dan Zissman the next year, less than four months into a relationship that started through Trotskyist activities. Their daughter Merril Zissman was born in December 1942. In this period, she also became one of the few female members of the New York City-based group of science fiction writers, editors, artists and fans, the Futurians, which included Kornbluth. The Zissmans separated about 1945; in 1946 Frederik Pohl, another Futurian, began living with her. After her divorce from Zissman became final in 1948, she married Pohl, November 25, 1948.

Judith Merril began writing professionally, especially short stories about sports, starting in 1945, before publishing her first science-fiction story in 1948. A number, but by no means all, of her contributions were to magazines edited by fellow ex-Futurians. She was a co-founder of the Hydra Club in this period. Her story "Dead Center" (The Magazine of Fantasy and Science Fiction, November, 1954) is one of only two stories take from any science fiction or fantasy magazine for the Best American Short Stories volumes edited by Martha Foley in the 1950s.

Her second child, Ann, was born in 1950; in 1952 she separated from Pohl, and their divorce finalized the next year, in which she also lived with Walter M. Miller, Jr. for six months. Her third marriage came in 1960, devolving into separation, in 1963, but never a final divorce. Ann's daughter (Merril's granddaughter), Emily Pohl-Weary, is an author of young adult fiction and science-fiction stories. (She also co-authored Merril's biography after the latter's death, using access to her drafts, notes and letters).

Merril began editing science fiction short story anthologies in 1950...especially a popular "Year's Best" story-anthology series of that ran from 1956 to 1967...and published her last in 1985. In her editorial introductions, talks and other writings, she actively argued that science fiction should no longer be isolated but become part of the literary mainstream. She also had an important role as Books Editor for The Magazine of Fantasy and Science Fiction from 1965 until 1969.

Science fiction scholar Rob Latham noted in 2005 that "throughout the 1950s, Merril, along with fellow SF authors James Blish and Damon Knight had taken the lead in promoting higher literary standards and a greater sense of professionalism within the field" -- especially by establishing an annual series of writers' conferences in Milford, Pennsylvania, where Merril then lived. Manuscripts were workshopped at these avid gatherings, thus encouraging more care in the planning of stories, and a sense of solidarity was promoted, eventually leading to the formation of the Science Fiction Writers Association." However, "disaffected authors began griping about a `Milford Mafia' that was endangering SF's unique virtues by imposing literary standards essentially alien to the field."

A project Merril began in the early 1960s, under contract to Lion Books in Chicago, was abortive, but inspired her publisher's editor, Harlan Ellison, to go forward with his version of the project, Dangerous Visions (Doubleday, 1967). As an initiator of the New Wave movement, in 1968 she edited the anthology England Swings SF. She collected the stories for it while living in England for a year in the late 1960s.

In the late 1960s, Merril moved to Canada, citing what she called undemocratic suppression of anti-war activities by the U.S. government. She was a founding resident of Rochdale College, an experiment in student-run education and cooperative living, very much part of the zeitgeist of the era. At Rochdale, she was the "Resource Person on Writing and Publishing" with her extensive personal collection of books and unpublished manuscripts.

In 1970 she began an endowment at the Toronto Public Library for the collection of all science fiction published in the English language. She donated all of the books and magazines in her possession to the library, which set up the "Spaced Out Library" (Merril's term), with Merril in a non-administrative role as curator. The library has had its own physical space from the onset. It was renamed in Merril's last decade as the Merril Collection of Science Fiction, Speculation, and Fantasy. Merril received a small annual stipend as curator, and when low on funds, she lived in her office at the library, sleeping on a cot.

From 1978 to 1981 Merril introduced Canadian broadcasts of Doctor Who As the "Undoctor," Merril presented short (3-7 minute) philosophical commentaries on the show's themes.

Merril was an active organizer and promoter of science fiction in Canada. For example, she founded the Hydra North network of writers . In 1985 she launched and edited the first issue of [Tesseract]s, the first Canadian science fiction anthology, which helped to define a particularly Canadian version of science fiction writing.

In the early 1980s, Merril donated to the National Archives of Canada her voluminous collection of correspondence, unpublished manuscripts and Japanese science-fiction material. This became the National Archives' "Judith Merril Fonds."

Merril became a Canadian citizen in 1976. She became active in the Writers' Union. When the Union debated at its annual meeting whether people could write about other genders and ethnic groups, she exclaimed "Who will speak for the aliens?" which closed the debate.

From the mid-1970s until her death, Merril spent much time in the Canadian peace movement, including traveling to Ottawa dressed as a witch in order to hex Parliament for allowing American cruise missile testing over Canada.

She also remained active in the SF world as a commentator and mentor. Her lifetime of work was honoured by the International Authors Festival at the Harbourfront Centre, Toronto. She spent much time working on her memoirs.

The Science Fiction and Fantasy Writers of America (the renamed SFWA) made Merril its Author Emeritus for 1997.

In contemplation of her death, she left a sizable sum of money to hold a celebratory/memorial party at Toronto's Bamboo Club. An organized editor to the end, she prepared detailed lists of who should call whom when she finally died.