Bowen was born of the Anglo-Irish gentry and spent her early childhood in Dublin, as related in her autobiographical fragment Seven Winters (1942), and at the family house she later inherited at Kildorrery, County Cork. The history of the house is recounted in Bowen's Court (1942), and it is the scene of her novel The Last September (1929), which takes place during the troubles that preceded Irish independence. When she was 7, her father suffered a mental illness, and she departed for England with her mother, who died when Elizabeth was 12. An only child, she lived with relatives on the Kentish coast.

With a little money that enabled her to live independently in London and to winter in Italy, Bowen began writing short stories at 20. Her first collection, Encounters, appeared in 1923. It was followed in 1927 by The Hotel, which contains a typical Bowen heroine—a girl attempting to cope with a life for which she is unprepared. The Last September (1929) is an autumnal picture of the Anglo-Irish gentry. The House in Paris (1935), another of Bowen's highly praised novels, is a story of love and betrayal told partly through the eyes of two children.

During World War II, Bowen worked for the Ministry of Information in London and served as an air raid warden. Her novel set in wartime London, The Heat of the Day (1949), is among her most significant works. The war also forms the basis for one of her collections of short stories, The Demon Lover (1945; U.S. title, Ivy Gripped the Steps). Her essays appear in Collected Impressions (1950) and Afterthought (1962). Bowen's last book, Pictures and Conversations (1975), is an introspective, partly autobiographical collection of essays and articles.