Austin was born Mary Hunter on September 9, 1868 in Carlinville, Illinois (the fourth of six children) to George and Susannah (Graham) Hunter. She graduated from Blackburn College in 1888. Her family moved to California in the same year and established a homestead in the San Joaquin Valley. Mary married Stafford Wallace Austin on May 18, 1891 in Bakersfield, California. He was from Hawaii and a graduate of the University of California, Berkeley.

For 17 years Austin made a special study of Indian life in the Mojave Desert, and her publications set forth the intimate knowledge she thus acquired. She was a prolific novelist, poet, critic, and playwright, as well as an early feminist and defender of Native American and Spanish-American rights. She is best known for her tribute to the deserts of the American Southwest, The Land of Little Rain (1903). Her play, The Arrow Maker, dealing with Indian life, was produced at the New Theatre, (New York) in 1911.

Austin and her husband were involved in the local California Water Wars, in which the water of Owens Valley was eventually drained to supply Los Angeles. When their battle was lost, he moved to Death Valley, California, and she moved to Carmel, California. There, she was part of a social circle that included Jack London, Ambrose Bierce, and George Sterling and was one of the founders of the Forest Theater.

Austin died August 13, 1934 in Santa Fe, New Mexico. Mount Mary Austin, in the Sierra Nevada, was named in her honor. It is located 8.5 miles west of her long time home in Independence, California. A biography was published in 1939.