Born at Dacre Lodge, 49 Plashet Road, Forest Gate, Essex, (now Greater London), Renault was educated at St Hugh's College of Oxford University, then an all-women's college, receiving a undergraduate degree in English in 1928. In 1933, she began training as a nurse at Oxford's Radcliffe Infirmary. During her training, she met Julie Mullard, a fellow nurse with whom she established a life-long romantic relationship.

She worked as a nurse while beginning a writing career, treating Dunkirk evacuees at the Winford Emergency Hospital in Bristol, and working in Radcliffe Infirmary's brain surgery ward until 1945. She published her first novel, Purposes of Love, in 1939; it had a contemporary setting, like her other early novels, which novelist Linda Proud described as "a strange combination of Platonism and hospital romance". Her 1943 novel The Friendly Young Ladies, about a lesbian relationship between a writer and a nurse, seems inspired by her own relationship with Mullard.

In 1948, after her novel Return to Night won a MGM prize worth $150,000, she and Mullard emigrated to South Africa, where they remained for the rest of their lives. There, according to Proud, they found a community of gay expatriates who had "escaped the repressive attitudes towards homosexuality in Britain for the comparatively liberal atmosphere of Durban.... Mary and Julie found themselves able to set up home together in this new land without causing the outrage they had sometimes provoked at home." (Renault and Mullard were critical of the less liberal aspects of their new home, participating in the Black Sash movement against apartheid in the 1950s.)

It was in South Africa that Renault was able to write forthrightly about homosexual relationships for the first time — in her last contemporary novel, The Charioteer (1953), the story of two young gay servicemen who fall in love during World War II, and then in her first historical novel, The Last of the Wine (1956) , the story of two young Athenians who study under Socrates and fight against Sparta. Both these books had male protagonists, as did all her later works that included homosexual themes; her sympathetic treatment of love between men would win Renault a wide gay readership. It would also foster rumors that Renault was really a gay man writing under a female pseudonym. Renault found these rumors amusing, but also sought to distance herself from being labeled a "gay writer."

Her subsequent historical novels were all set in ancient Greece, including a pair of novels about the mythological hero Theseus and a trilogy about the career of Alexander the Great. In a sense, The Charioteer — the story of two young gay servicemen during World War II who try to model their relationship on the ideals expressed in Plato's Phaedrus and Symposium — is a warm-up for Renault's historical novels. By turning away from the 20th century and focusing on stories about male lovers in the warrior societies of ancient Greece, Renault no longer had to deal with homosexuality and antigay prejudice as social "problems"; instead she was free to focus on larger ethical and philosophical concerns while examining the nature of love and leadership. (Ironically, The Charioteer could not be published in the U.S. until 1959, after the success of The Last of the Wine proved that American readers and critics would accept a serious gay love story.)