Born in Sydney, Keneally was educated at St Patrick's College, Strathfield, where a writing prize was named after him. He entered St Patrick's Seminary, Manly to train as a Catholic priest but left before his ordination. He worked as a Sydney schoolteacher before his success as a novelist, and he was a lecturer at the University of New England (1968—70). He has also written screenplays, memoirs and non-fiction books.

Keneally was known as "Mick" until 1964 but began using the name Thomas when he started publishing, after advice from his publisher to use what was really his first name. He is most famous for his Schindler's Ark (1982) (later republished as Schindler's List), which won the Booker Prize and is the basis of the film Schindler's List. Many of his novels are reworkings of historical material, although modern in their psychology and style.

Keneally has also acted in a handful of films. He had a small role in The Chant of Jimmie Blacksmith (based on his novel) and played Father Marshall in the Fred Schepisi movie, The Devil's Playground (1976) (not to be confused with a similarly-titled documentary by Lucy Walker about the Amish rite of passage called rumspringa).

In 1983 he was made an Officer of the Order of Australia (AO). He is an Australian Living Treasure.

He is a strong advocate of the Australian republic, meaning the severing of all ties with the British monarchy, and published a book on the subject Our Republic in 1993. Several of his Republican essays appear on the web site of the Australian Republican Movement.

Keneally is a keen supporter of rugby league football, in particular the Manly-Warringah Sea Eagles club of the NRL. He made an appearance in the 2007 rugby league drama film The Final Winter.

In March 2009, the Prime Minister of Australia, Kevin Rudd, gave an autographed copy of Keneally's Lincoln biography to President Barack Obama as a state gift.

Most recently Thomas Keneally featured as a writer in the critically acclaimed Australian drama, "Our Sunburnt Country".

Thomas Keneally's nephew Ben is married to the NSW Premier, Kristina Keneally.

Keneally wrote the Booker Prize-winning novel in 1982, inspired by the efforts of Poldek Pfefferberg, a Holocaust survivor. In 1980 Pfefferberg met Keneally in his shop, and learning that he was a novelist, showed him his extensive files on Oskar Schindler. Keneally was interested, and Pfefferberg became an advisor for the book, accompanying Keneally to Poland where they visited Kraków and the sites associated with the Schindler story. Keneally dedicated Schindler's Ark to Pfefferberg: "who by zeal and persistence caused this book to be written." He said in an interview in 2007 that what attracted him to Oskar Schindler was that "it was the fact that you couldn't say where opportunism ended and altruism began. And I like the subversive fact that the spirit breatheth where it will. That is, that good will emerged from the most unlikely places". The book was later made into a film titled Schindler's List (1993) directed by Steven Spielberg, earning the director his first Best Director Oscar. Keneally's meeting with Pfefferberg and their research tours are detailed in Searching for Schindler: A Memoir (2007).Some of the Pfefferberg documents that inspired Keneally are now housed in the State Library of New South Wales in Sydney. In 1996 the State Library purchased this material from a private collector.In April 2009 a copy of the list (including 801 names) was found in the documentation Thomas Keneally used as research material for his novel.

Novels

• The Place at Whitton (1964)
• The Fear (1965), rewritten in (1989) as By the Line.
• Bring Larks and Heroes (1967), winner of the Miles Franklin Award, set in an unidentified British penal colony.
• Three Cheers for the Paraclete (1968), winner of the Miles Franklin Award, comic novel of a doubting priest.
• The Survivor (1969), a survivor looks back on a disastrous Arctic expedition.
• A Dutiful Daughter (1971), Keneally's personal favourite.
• The Chant of Jimmie Blacksmith (1972), also filmed. Written through the eyes of an exploited Aborigine who explodes in rage. Based on an actual incident. Keneally has said he would not now presume to write in the voice of an Aborigine, but would have written the story as seen by a white character.
• Blood Red, Sister Rose (1974), a novel based loosely on the life of Joan of Arc.
• Gossip from the Forest (1975), tells of the negotiation of the armistice that ended World War I.
• Season in Purgatory (1976), love among Tito's partisans in World War II.
• Ned Kelly and the City of the Bees (1978), a book for children.
• A Victim of the Aurora (1978), a detective story set on an Antarctic expedition.
• Passenger (1979)
• Confederates (1979), based on Stonewall Jackson's army.
• The Cut-Rate Kingdom (1980), Australia at war in 1942.
• Schindler's Ark (1982), winner of the Booker Prize, later retitled Schindler's List.
• A Family Madness (1985)
• The Playmaker (1987), prisoners perform a play in Australia in the 18th Century.
• Act of Grace (1985), (under the pseudonym William Coyle)
• By the Line (1989), working-class families face World War II in Sydney.
• Towards Asmara (1989), the conflict in Eritrea.
• Flying Hero Class (1991), Palestinians hijack an aeroplane carrying an Aboriginal folk dance troupe.
• Chief of Staff (1991), (under the pseudonym William Coyle)
• Woman of the Inner Sea (1993), Keneally retells a story once told him by a young woman that haunted his imagination.
• Jacko (1993), madness and television.
• A River Town (1995)
• Bettany's Book (2000)
• An Angel in Australia (2000), also published as Office of Innocence
• The Tyrant's Novel (2003), an Australian immigration detainee tells his story
• The Widow and Her Hero (2007), the effect of war on those left behind
• The People's Train (2009), a dissident escapes from Russia to Australia in 1911, only to return to fight in the revolution

Non-fiction

• Moses the Law-Giver (1975)
• Outback (1983)
• Beyond the Dreamtime (1987)
• A Journey to the Southwest (1992)
• Ireland and the Irish (1992)
• Memoirs from a Young Republic (1993)
• The Des Hasler Story (1993) Footballer Des Hasler
• Our Republic (1995)
• A Memoir (1995), autobiography
• The Great Shame (1998)
• American Scoundrel (2002)
• Lincoln (2003), biography of Abraham Lincoln
• The Life of the Notorious Civil War General Dan Sickles (2003), biography of Daniel Sickles
• The Improbable Birth of Australia (2005)
• A Memoir (2007)
• Origins to Eureka (2009)

Drama

• Halloran's Little Boat (1968)
• Childermas (1968)
• An Awful Rose (1972)
• Bullie's House (1981)