Lurie was born in Melbourne, Australia in 1938, to Arie and Esther Lurie. His first novel was the comic Rappaport (Hodder and Stoughton, 1966) and focused with a day in the life of a young Melbourne antique dealer and his immature friend Friedlander. The characters, transplanted to London, were further chronicled in Rappaport's Revenge (1973). Lurie's self-exile from Australia to Europe, the UK and Northern Africa provides much of the material for his fiction. His second novel was The London Jungle Adventures of Charlie Hope (Hodder and Stoughton, 1968). Flying Home (1978) was named by the National Book Council as one of the ten best Australian books of the decade. Subsequent novels are Seven Books for Grossman (1983), really a novella parodying the styles of various authors; and Madness (1991), about a writer dealing with a mentally unstable girlfriend.

Lurie is best known for his short stories. He recently wrote an instructional guide When and How to Write Short Stories and What They Are (2000). He has been published in many prestigious magazines including The New Yorker, The Virginia Quarterly, Punch, The Times, The Telegraph Magazine, Transatlantic Review, Island, Meanjin, Overland, Quadrant and Westerly.

A co-worker and friend of Peter Carey, he wrote an early critical review of Carey's first book in Nation Review, November 29, 1974. In November 2006 he was given the Patrick White Award for under-recognised, lifetime achievement in literature.

His 2008 novel To Light Attained deals with the suicide of his daughter.

Novels

• Rappaport (Hodder and Stoughton, 1966)
• The London Jungle Adventures of Charlie Hope (Hodder and Stoughton, 1968)
• Happy Times (1969)
• Rappaport's Revenge (1973)
• Inside the Wardrobe (1975)
• Flying Home (1978)
• Running Nicely (1979)
• Dirty Friends (1981)
• Seven Books for Grossman (1983)
• Outrageous Behaviour (a collection of best stories, 1984)
• The Night We Ate the Sparrow (1985)
• Two Brothers, Running (1990)
• Madness (1991)
• The String (1995)
• Welcome to Tangier (1997)
• The Secret Strength of Children (2001)
• Seventeen Versions of Jewishness: Twenty Examples (2001)

Essays and journalism

• The English in Heat (1972)
• Hack Work (1977)
• Public Secrets (1981)
• Snow Jobs (1985)
• My Life as a Movie (1988)

Other books include a collection of plays called Waterman (1979); an autobiography Whole Life (1987); and a number of children's books, including the popular Twenty-Seventh Annual African Hippopotamus Race (1969), which was voted the favourite young storybook by an Australian author by schoolchildren in Victoria.