Lowry was born on March 20, 1937, in Honolulu, Territory of Hawaii, to Katherine Gordon Landis and Robert E. Hammersberg. Her maternal grandfather, Merkel Landis, a banker.
In 1977, at 40 years old, Lowry's first book, A Summer to Die, was published. During that same year, Donald Lowry and she divorced.
Lowry's son Grey, a USAF major and flight instructor, was killed in the crash of his fighter plane in 1995. Lowry acknowledged that it was the most difficult day of her life, and she said, "His death in the cockpit of a warplane tore away a piece of my world, but it left me, too, with a wish to honor him by joining the many others trying to find a way to end conflict on this very fragile earth."
As of 2023, Lowry divides her time between Maine and Naples, Florida, and she still remains an active writer and speaker.
Lowry first began her career as a freelance journalist. In the 1970s, she submitted a short story to Redbook magazine, which was intended for adult audiences, but was written from a child's perspective. An editor working at Houghton Mifflin who read the Redbook story suggested to Lowry that she should write a children's book. Lowry agreed and wrote her first book A Summer to Die, which was later published by Houghton Mifflin in 1977 when she was 40 years old. The book featured the theme of terminal illness, which is based on Lowry's own experiences with her sister Helen.
Lowry continued to write about difficult topics in her next publication, Autumn Street (1979), which explores themes of coping with racism, grief, and fear at a young age. The novel is told from the perspective of a young girl who is sent to live with her grandfather during World War II, which is also based on her own experiences of having her father deployed during World War II. Of all the books she has published, Autumn Street is considered to be her most autobiographical.
In the same year of publishing Autumn Street, Lowry also published her novel Anastasia Krupnik, the first installment in the Anastasia series. The series, which touches on serious themes with a humorous approach, continued through to 1995.
Lowry published Number the Stars in 1989, which received multiple awards, including the 1990 Newbery Medal. Lowry received another Newbery in 1994, for The Giver 1993. After publishing The Giver, she went on to publish another three companion novels that take place in the same universe: Gathering Blue 2000, Messenger 2004, and finally Son 2012, which tied all three of the previous books together. Collectively, they are referred to as The Giver Quartet. The New York Times described the quartet as "less a speculative fiction than a kind of guide for teaching children (and their parents, if they're listening carefully) how to be a good person.
In early 2020, she released a book of poetry, called On the Horizon, charting her childhood memories of life in Hawaii and Tokyo, and the lives lost during the attack on Pearl Harbor and the bombing of Hiroshima.
Lowry won the Newbery Medal in 1990 for her novel Number the Stars, and again in 1994 for The Giver. For Number the Stars, Lowry has also received the National Jewish Book Award in 1990, in the Children's Literature category, and the Dorothy Canfield Fisher Children's Book Award in 1991.