McCullough was born in Wellington, in Central West New South Wales, in 1937 to James and Laurie McCullough. Her mother was a New Zealander of part-Māori descent. During her childhood, her family moved around a great deal, and she was also "a voracious reader". Her family eventually settled in Sydney, and she attended Holy Cross College, having a strong interest in the humanities.
Before entering tertiary education, she previously earned a living as a teacher, librarian and journalist. In her first year of medical studies at the University of Sydney she suffered dermatitis from surgical soap and was told to abandon her dreams of becoming a medical doctor. Instead, she switched to neuroscience and worked in Royal North Shore Hospital in Sydney.
In 1963, she moved for four years to the United Kingdom; at the Great Ormond Street hospital in London, she met the chairman of the neurology department at Yale University who offered her a research associate job at Yale. McCullough spent ten years from April 1967 to 1976 researching and teaching in the Department of Neurology at the Yale Medical School in New Haven, Connecticut, United States. It was while at Yale that she wrote her first two books. One of these, The Thorn Birds, became an international best seller that in 1983 was turned into one of the most watched television mini-series of all time.
The success of these books enabled her to give up her medical-scientific career and to try to "live on her own terms" In the late 1970s, after stints in London and Connecticut, USA, she finally settled on the isolation of Norfolk Island in the Pacific, where she met her husband, Ric Robinson (then aged 33), whom she married on 13 April 1983 (she was aged 46).
In 1984, a portrait of Colleen McCullough, painted by Wesley Walters, was a finalist in the Archibald Prize. The prize is awarded for the "best portrait painting preferentially of some man or woman distinguished in Art, Letters, Science or Politics".
The depth of historical research for the novels on ancient Rome led to her being awarded a Doctor of Letters degree by Macquarie University in 1993.
McCullough was a member of the New York Academy of Sciences and was a fellow of the American Association for the Advancement of Science.
McCollough was a very well-known monarchist.
Her 2008 novel The Independence of Miss Mary Bennet engendered controversy with her reworking of characters from Jane Austen's Pride and Prejudice. Susannah Fullerton, the president of the Jane Austen Society of Australia, said she "shuddered" that Elizabeth Bennet was rewritten as weak, and Mr. Darcy as savage. "She is one of the strongest, liveliest heroines in literature … [and] Darcy's generosity of spirit and nobility of character make her fall in love with him – why should those essential traits in both of them change in 20 years?"