Haushofer was born in Frauenstein in Upper Austria. She attended Catholic boarding school in Linz, and went on to study German literature in Vienna, as well as Graz. After her years in school, she settled in Steyr.
In 1941, she married Manfred Haushofer, a dentist, and had two sons, Christian and Manfred. In 1950, they divorced, only to remarry in 1958.
Earning literary awards as early as 1953, Haushofer went on to publish her first novel, A Handful of Life in 1955. In 1956, she won the Theodor-Körner Prize for early contributions and projects involving art and culture. In 1958, her novella We Murder Stella was published.
The Wall, considered her finest achievement, was completed in 1963. The novel was written out four times in longhand between 1960 and 1963, but had to wait until 1968, two years before Haushofer's death, to be printed. In a letter written to a friend in 1961, Marlen describes the difficulty with its composition:
I am writing on my novel and everything is very cumbersome because I never have much time and, mainly, because I can not embarrass myself. I must continuously inquire whether what I say about animals and plants is actually correct. One can not be precise enough. I would be very happy, indeed, if I were able to write the novel only half as well as I am imagining it in my mind.
Haushofer commented a year later in a letter to the same friend:
I am extremely industrious. My novel is completed in its first draft. I have already completed one hundred pages of the rewrite. Altogether there will be 360 pages. Writing strains me a great deal and I suffer from headaches. But I hope that I will be finished by the beginning of May (I must allow at least four weeks for the typing)... And the household must keep on running also. All that is very difficult for me because I can only concentrate on one thing and forcing me to be versatile makes me extremely nervous. I have the feeling as if I were writing into the air.
Her overall addition to Austrian literature, as well as her last short-story collection, Terrible Faithfulness, earned her a Grand Austrian State Prize for literature in 1968. Her last novel, The Attic, was published in 1969, as was her autobiographical account of a childhood, Nowhere Ending Sky.
In 1970, she died of bone cancer at a clinic in Vienna. Her writing has influenced authors like Nobel Prize winner Elfriede Jelinek, who dedicated one of her Princess Plays to Haushofer.