Hill was born in Scarborough, North Yorkshire. Her home town was later referred to in her novel A Change for the Better (1969) and in some short stories like Cockles and Mussels.
She attended Scarborough Convent School, where she became interested in theatre and literature. Her family left Scarborough in 1958 and moved to Coventry where her father worked in car and aircraft factories. Hill states that she attended a girls’ grammar school, Barr's Hill. Her fellow pupils included Jennifer Page, the first Chief Executive of the Millennium Dome. At Barrs Hill, she took A levels in English, French, History, and Latin, proceeding to an English degree at King's College London. By this time, she had already written her first novel, The Enclosure, which was published by Hutchinson in her first year at the university. The novel was criticised by The Daily Mail for its sexual content, with the suggestion that writing in this style was unsuitable for a "schoolgirl".
Her next novel Gentleman and Ladies was published in 1968. This was followed in quick succession by A Change for the Better, I'm the King of the Castle, The Albatross and other stories, Strange Meeting, The Bird of Night, A Bit of Singing and Dancing and In the Springtime of the Year, all written and published between 1968 and 1974.
She was engaged to David Lepine, organist at Coventry Cathedral but he died of a coronary in 1972. In 1975, she married Shakespeare scholar Stanley Wells, and they moved to Stratford upon Avon. Their first daughter, author Jessica Ruston, was born in 1977, and their second daughter, Clemency, was born in 1985. A middle daughter, Imogen, was born prematurely, and died at the age of four weeks. In 2013 it was reported that she had left her husband and moved in with Barbara Machin, creator of Waking The Dead, who is adapting Hill’s crime fiction series Serrailler for ITV, and previously adapted another of Susan's works The Small Hand. However, she said that she was 'still married' to Wells in 2015. In 2016, Machin left Hill for comedienne Rhona Cameron, prompting a friend to comment to the press, "Susan is devastated and heart- broken. Barbara announced out of the blue that she was leaving her. It’s very sad. Susan still loves her and hopes she will see sense and come back."
Hill has recently founded her own publishing company, Long Barn Books, which has published one work of fiction.
Hill's novels are written in a descriptive gothic style, especially her ghost story The Woman in Black, which was published in 1983. She has expressed an interest in the traditional English ghost story, which relies on suspense and atmosphere to create its impact, similar to the classic ghost stories by Montague Rhodes James and Daphne du Maurier. The novel was turned into a play in 1987 and continues to run in the West End of London, joining the group of plays that have run for over twenty years. It was also made into a television film in 1989, and a film by Hammer Film Productions in 2012. She wrote another ghost story with similar ingredients, The Mist in the Mirror in 1992, and a sequel to du Maurier's Rebecca entitled Mrs. De Winter in 1993.
In 2004, Hill began a series of crime novels featuring detective Simon Serrailler, entitled The Various Haunts of Men (2004). This was followed by The Pure in Heart (2005), The Risk of Darkness (2006), The Vows of Silence (2009), Shadows in the Street (2010), The Betrayal of Trust (2011), A Question of Identity (2013), and The Soul of Discretion (2014). One of Hill's plays On the face of it has been included in the Indian school curriculum for the 12th grade.1971 Somerset Maugham Award I'm the King of the Castle
1972 Whitbread Novel Award The Bird of Night
1972 John Llewellyn Rhys Prize The Albatross
1988 Nestlé Smarties Book Prize (Gold Award) (6–8 years category) Can It Be True?: A Christmas Story