One of three sons, Findley was born in Toronto, Ontario, to Allan Gilmour Findley, a stockbroker, and his wife, the former Margaret Maude Bull. His paternal grandfather was president of Massey-Harris, the farm-machinery company. He was raised in the upper class Rosedale district of the city, attending boarding school at St. Andrew's College (although leaving during grade 10 for health reasons). He pursued a career in the arts, studying dance and acting, and had significant success as an actor before turning to writing. He was part of the original Stratford Festival company in the 1950s, acting alongside Alec Guinness, and appeared in the first production of Thornton Wilder's The Matchmaker at the Edinburgh Festival. He also played Peter Pupkin in the CBC Television adaptation of Stephen Leacock's Sunshine Sketches of a Little Town in 1952, and had an uncredited (and unconfirmed) minor role in the 1964 television film A Man of the Renaissance.

Though Findley had declared his homosexuality as a teenager, he married actress/photographer Janet Reid (born 1930) in 1959, but the union lasted only three months and was dissolved by divorce or annulment two years later. Eventually he became the domestic partner of writer William Whitehead, whom he met in 1962, either while working as an arts reporter for the Canadian Broadcasting Corporation or while appearing in a theatre production (sources differ). Findley and Whitehead also collaborated on several documentary projects in the 1970s.

Through Wilder, Findley became a close friend of actress Ruth Gordon, whose work as a screenwriter and playwright inspired Findley to consider writing as well. After Findley published his first short story in the Tamarack Review, Gordon encouraged him to pursue writing more actively, and he eventually left acting in the 1960s.

Findley's first two novels, The Last of the Crazy People (1967) and The Butterfly Plague (1969), were originally published in Britain and the United States after having been rejected by Canadian publishers. Findley's third novel, The Wars, was published to great acclaim in 1977 and went on to win the Governor General's Award for fiction. It was adapted for film in 1981.

Timothy Findley received a Governor General's Award, the Canadian Authors Association Award, an ACTRA Award, the Order of Ontario, the Ontario Trillium Award, and in 1985 he was appointed an Officer of the Order of Canada. He was a founding member and chair of the Writers' Union of Canada, and a president of the Canadian chapter of PEN International.

His writing, typical of the Southern Ontario Gothic genre, was heavily influenced by Jungian psychology, and mental illness, gender and sexuality were frequent recurring themes in his work. His characters often carried dark personal secrets, and were often conflicted — sometimes to the point of psychosis — by these burdens.

He publicly mentioned his homosexuality, passingly and perhaps for the first time, on a broadcast of the programme The Shulman File in the 1970s, taking flabbergasted host Morton Shulman completely by surprise. Shulman was a man who did not rattle easily.

Findley and Whitehead resided at Stone Orchard, a farm near Cannington, Ontario, and in the south of France. In 1996, Findley was honoured by the French government, who declared him a Chevalier de l'Ordre des arts et des lettres.

Findley was also the author of several dramas for television and stage. Elizabeth Rex, his most successful play, premiered at the Stratford Festival of Canada to rave reviews and won a Governor General's award. Shadows, first performed in 2001, was his last completed work. Findley was also an active mentor to a number of young Canadian writers, including Marnie Woodrow and Elizabeth Ruth.

In October 2001 when, as writer-in-residence at the University of Calgary, he gave a talk in which he compared oil companies to the terrorists who attacked the World Trade Center the month before. He said the oil companies are doing little to reduce greenhouse gases and they rush to exploit global gas and petroleum reserves. “What’s going to happen in the future if we allow corporate profits to prevail above all other concerns?” Findley asked. “Talk about suicide bombers and all the innocent others who die along with them. Think about that (corporate profits) and consider the future of our children, our country and our civilization.”

In the final years of Findley's life, declining health led him to move his Canadian residence to Toronto, and Stone Orchard was purchased by Canadian dancer Rex Harrington.

In 2002 he was inducted into Canada's Walk of Fame.

Findley died on June 21, 2002, in Brignoles, France, not far from his house in Cotignac.

Novels

• The Last of the Crazy People (1967)
• The Butterfly Plague (1969)
• The Wars (1977) (translated into French as Guerres)
• Famous Last Words (1981) (translated into French as Le Grand Elysium Hôtel)
• Not Wanted on the Voyage (1984)
• The Telling of Lies (1986) (Edgar Award, Best Paperback Original, 1989)
• Headhunter (1993)
• The Piano Man's Daughter (1995)
• You Went Away (1996)
• Pilgrim (1999)
• Spadework (2001)

Short stories

• Dinner Along the Amazon (1984)
• Stones (1988)
• Dust to Dust (1997)

Drama

• Don't Let the Angels Fall (1969)
• The Whiteoaks of Jalna (1972)
• The Newcomers (1977)
• Can You See Me Yet? (1977)
• The Stillborn Lover (1993)
• The Trials of Ezra Pound (2000)
• Elizabeth Rex (2001)
• Shadows (2001)

Memoirs

• Pages from a Writer's Workbook (1990)
• From Stone Orchard (1998)
• Travels of a Writer (2004)