Mary Helen MacKillop was born in Fitzroy, Victoria, on 15 January 1842. MacKillop's parents lived in Roy Bridge, Inverness-shire, Scotland, prior to emigrating to Australia.MacKillop's father, Alexander MacKillop, born in Perthshire, had been educated at The Scots College in Rome and at Blairs College in Kincardineshire, for the Catholic priesthood but at the age of 29 left just before he was due to be ordained. He migrated to Australia and arrived in Sydney in 1838. MacKillop's mother, Flora MacDonald, born in Fort William, had left Scotland and arrived in Melbourne in 1840. Her father and mother married in Melbourne on 14 July 1840. MacKillop was the eldest of their eight children. Her younger siblings were Margaret ("Maggie", 1843–1872), John (1845–1867), Annie (1848–1929), Alexandrina ("Lexie", 1850–1882), Donald (1853–1925), Alick (who died at 11 months old) and Peter (1857–1878). Donald would later become a Jesuit priest and work among the Aborigines in the Northern Territory. Lexie also became a nun.

MacKillop was educated at private schools and by her father. She received her First Holy Communion on 15 August 1850 at the age of eight. In February 1851, Alexander MacKillop left his family behind after having mortgaged the farm and their livelihood and made a trip to Scotland lasting some 17 months. Throughout his life he was a loving father and husband but never able to make a success of his farm. He was even worse as a politician or at any kind of job. During most of the times the family had to survive on the small wages the children were able to bring home.

MacKillop started work at the age of 14 as a clerk in Melbourne and later as a teacher in Portland. To provide for her needy family, in 1860 she took a job as governess at her aunt and uncle's property at Penola, South Australia where she was to look after their children and teach them. Already set on helping the poor whenever possible, she included the other farm children on the Cameron estate as well. This brought her into contact with Father Woods, who had been the parish priest in the south east since his ordination to the priesthood in 1857 after completing his studies at Sevenhill.

MacKillop stayed for two years with the Camerons of Penola before accepting a job teaching the Cameron children of Portland, Victoria in 1862. Later she taught at the Portland school and after opening her own boarding school, Bay View House Seminary for Young Ladies, now Bayview College, in 1864, was joined by the rest of her family.

Father Woods had been very concerned about the lack of education and particularly Catholic education in South Australia. In 1866, he invited MacKillop and her sisters Annie and Lexie to come to Penola and open a Catholic school. Woods was appointed director of education and became the founder, along with MacKillop, of a school they opened in a stable there. After renovations by their brother, the MacKillops started teaching more than fifty children. At this time MacKillop made a declaration of her dedication to God and began wearing black.

In 1867, MacKillop became the first sister and mother superior of the newly formed order of the Sisters of St Joseph of the Sacred Heart, and moved to the new convent in Grote Street, Adelaide. In the same year, at age 25, she adopted the religious name Sister Mary of the Cross. In Adelaide they founded a new school at the request of the bishop, Laurence Bonaventure Sheil. Dedicated to the education of the children of the poor, it was the first religious order to be founded by an Australian. The rules developed by Father Woods and MacKillop for the convent emphasised poverty, a dependence on divine providence, no ownership of personal belongings, faith that God would provide and willingness to go where needed. The rules were approved by Bishop Sheil. By the end of 1867, ten other nuns had joined the Josephites who had adopted a plain brown habit. The Josephite nuns became colloquially known as the Brown Joeys.

In an attempt to provide education to all the poor, particularly in country areas, a school was opened at Yankalilla, South Australia in October 1867. By the end of 1869, more than 70 Josephite nuns were educating children at 21 schools in Adelaide and the country. MacKillop and her Josephites were also involved with an orphanage; neglected children; girls in danger; the aged poor; a reformatory (in Johnstown near Kapunda); a home for the aged; and incurably ill. Generally, the Josephite nuns were prepared to follow farmers, railway workers and miners into the isolated outback and live as they lived. They shared the same hardships while educating their children.

In December 1869, MacKillop and several other nuns travelled to Brisbane to establish the order in Queensland. They were based at Kangaroo Point and took the ferry or rowed across the Brisbane River to attend Mass at old St Stephen's Cathedral. Two years later, she was in Port Augusta, South Australia for the same purpose. The Josephite Congregation expanded rapidly and, by 1871, 130 nuns were working in more than 40 schools and charitable institutions across South Australia and Queensland.

Bishop Sheil spent less than two years of his episcopate in Adelaide and his absences and poor health left the diocese effectively without clear leadership for much of his tenure. This resulted in bitter factionalism within the clergy and disunity among the lay community. After the founding of the Josephites, Sheil appointed Father Woods as director general of Catholic education. Father Woods came into conflict with some of the clergy over educational matters and local clergy began a campaign to discredit the Josephites. As well as allegations of financial incompetence, rumours were also spread that MacKillop had a drinking problem. In fact, it was widely known that she drank alcohol on doctor's orders to relieve the symptoms of dysmenorrhea which often led to her being bedridden for days at a time. A 2010 investigation by Father Paul Gardiner, chaplain of the Mary MacKillop Penola Centre, found no evidence to support these allegations.

In early 1870, McKillop and fellow nuns of the Josephites heard of allegations that Father Keating, of Kapunda parish to Adelaide's north, had been sexually abusing children. The Josephites informed Father Woods, who in turn informed the vicar general Father John Smyth, who ultimately sent Keating back to Ireland. The reason for Keating's dismissal was publicly thought to be alcohol abuse. Keating's former Kapunda colleague Father Charles Horan was angered by Keating's removal, and there is evidence to suggest he sought vengeance against Woods by attacking the Josephites. Horan became acting vicar general after the death of Smyth in June 1870, and from this position sought to influence Bishop Sheil. Horan met with Sheil on 21 September 1871 and convinced him that the Josephites' constitution should be changed; the following day, when MacKillop apparently did not accede to the request, Sheil excommunicated her, citing insubordination as the reason. Though the Josephites were not disbanded, most of their schools were closed in the wake of this action. Forbidden to have contact with anyone in the church, MacKillop lived with a Jewish family and was also sheltered by Jesuit priests. Some of the order's nuns chose to remain under diocesan control, becoming popularly known as "Black Joeys".

On his deathbed, Sheil instructed Father Hughes to lift the excommunication on MacKillop. On 21 February 1872, he met her on his way to Willunga and absolved her in the Morphett Vale church. Later, an Episcopal Commission completely exonerated her.

The Australian Broadcasting Corporation (ABC) claimed in September 2010 that MacKillop had been "banished after uncovering sex abuse" and cited Father Paul Gardiner in evidence of this. Gardiner described this suggestion as false, saying "Early in 1870, the scandal occurred and the Sisters of Saint Joseph reported it to Father Tenison Woods, but Mary was in Queensland and no one was worried about her."

After the acquisition of the Mother House at Kensington in 1872, MacKillop made preparations to leave for Rome to have the rules of the Sisters of St Joseph officially approved.

MacKillop travelled to Rome in 1873 to seek papal approval for the religious congregation and was encouraged in her work by Pope Pius IX. The authorities in Rome made changes to the way Josephites lived in poverty, declared that the Superior General and her council were the authorities in charge of the order, and assured MacKillop that the congregation and their rule of life would receive final approval after a trial period. The resulting alterations to the rule of life caused a breach between MacKillop and Father Woods, who felt that the revised rule compromised the ideal of vowed poverty, and blamed MacKillop for not getting the rule accepted in its original form. Before Woods' death on 7 October 1889, he and MacKillop were personally reconciled, but he did not renew his involvement with her order.

While in Europe, MacKillop travelled widely to observe educational methods.

During this period, the Josephites expanded their operations into New South Wales and New Zealand. MacKillop relocated to Sydney in 1883 on the instruction of Bishop Reynolds of Adelaide.

When she returned in January 1875, after an absence of nearly two years, she brought approval from Rome for her nuns and the work they did, materials for her school, books for the convent library, several priests and most of all, 15 new Josephites from Ireland. Regardless of her success, she still had to contend with the opposition of priests and several bishops. This did not change after her unanimous election as Superior General in March 1875.

The Josephites were unique among Catholic church ministries in two ways. Firstly, the nuns lived in the community rather than in convents. Secondly the order's constitution required administration by a Superior General rather than a diocese headed by the bishop, a structure that remains unique today. This structure resulted in the order being forced to leave Bathurst in 1876 and Queensland by 1980 due to their respective bishop's refusal to accept this administrative structure.

Notwithstanding all the trouble, the order did expand. By 1877, it operated more than 40 schools in and around Adelaide, with many others in Queensland and New South Wales. With the help from Benson, Barr Smith, the Baker family, Emmanuel Solomon and other non-Catholics, the Josephites, with MacKillop as their leader and superior-general, were able to continue the religious and other good works, including visiting prisoners in jail.

After the appointment of Archbishop Roger Vaughan of Sydney in 1877 life became a little easier for MacKillop and her fellow nuns. Until his death in 1882, Father Joseph Tappeiner had given MacKillop his solid support and until 1883, she also had support of Bishop Reynolds of Adelaide. However, after the death of Vaughan, Reynolds had only one aim and that was to destroy MacKillop and the Josephites. If that could not be done he would at least try to bring them under his control. Reynolds was successful in exiling MacKillop and her removal as superior-general but in no way did he succeed in crushing her, her fellow nuns and bring them under his control.

After the death of Sydney's Archbishop Vaughan in 1883, Patrick Francis Moran became archbishop. Although he had a somewhat positive outlook toward the Josephites, he removed MacKillop as Mother General and replaced her with Sister Bernard Walsh.

Pope Leo XIII made the Josephites into a canonical Congregation in 1885, with its headquarters in Sydney. He gave the final approval to the Sisters of Saint Joseph of the Sacred Heart in 1888.

Although still living through alms, the Josephite nuns had been very successful. In South Australia, they had schools in many country towns including, Willunga, Willochra, Yarcowie, Mintaro, Auburn, Jamestown, Laura, Sevenhill, Quorn, Spalding, Georgetown, Robe, Pekina, Appila and several others. MacKillop continued her work for the Josephites in Sydney and tried to provide as much support as possible for those in South Australia. In 1883 the order was successfully established at Temuka in New Zealand, where MacKillop stayed for over a year. In 1889 it was also established in the Australian state of Victoria.

During all these years MacKillop assisted Mother Bernard with the management of the Sisters of St Joseph. She wrote letters of support, advice and encouragement or just to keep in touch. By 1896, MacKillop was back in South Australia visiting fellow nuns in Port Augusta, Burra, Pekina, Kapunda, Jamestown and Gladstone. That same year, she travelled again to New Zealand, spending several months in Port Chalmers and Arrowtown in Otago. During her time in New Zealand the Sisters of St Joseph a school were established in the South Island. In 1897, Bishop Maher of Port Augusta arranged for the Sisters of St Joseph to take charge of the St Anacletus Catholic Day School at Petersburg (now Peterborough).

MacKillop founded a convent and base for the Sisters of St Joseph in Petersburg on 16 January 1897. "On January 16th, 1897, the founder of the Sisters of St Joseph of the Sacred Heart, Mother Mary of the Cross, arrived in Petersburg to take over the school. She was accompanied by Sister Benizi (who was placed in charge of the school), Sister M. Joseph, Sister Clotilde and Sister Aloysius Joseph. They were met at the station by Rev. Father Norton who took them to the newly blessed convent, purchased for them on Railway Terrace." The property at 40 Railway Terrace is identified as the convent by a plaque placed by the Catholic diocese of Peterborough.

After the death of Mother Bernard, MacKillop was once more elected unopposed as Mother Superior-General in 1899, a position she held until her own death. During the later years of her life she had many problems with her health which continued to deteriorate. She suffered from rheumatism and after a stroke in Auckland, New Zealand in 1902, became paralysed on her right side. For seven years, she had to rely on a wheelchair to move around, but her speech and mind were as good as ever and her letter writing had continued unabated after she learned to write with her left hand. Even after suffering the stroke, the Josephite nuns had enough confidence in her to re-elect her in 1905.

MacKillop died on 8 August 1909 in the Josephite convent in North Sydney. The Archbishop of Sydney, Cardinal Moran, stated that: "I consider this day to have assisted at the deathbed of a Saint." She was laid to rest at the Gore Hill cemetery, a few kilometres up the Pacific Highway from North Sydney.

After MacKillop's burial, people continually took earth from around her grave. As a result, her remains were exhumed and transferred on 27 January 1914 to a vault before the altar of the Virgin Mary in the newly built memorial chapel in Mount Street, Sydney.

In 1925, the Mother Superior of the Sisters of St Joseph, Mother Laurence, began the process to have MacKillop declared a saint and Michael Kelly, Archbishop of Sydney, established a tribunal to carry the process forward. After several years of hearings, close examination of MacKillop's writings and a 23 year delay, the initial phase of investigations was completed in 1973. After further investigations, MacKillop's "heroic virtue" was declared in 1992. That same year, the church endorsed the belief that Veronica Hopson, apparently dying of leukaemia in 1961, was cured by praying for MacKillop's intercession; MacKillop was beatified on 19 January 1995 by Pope John Paul II. For the occasion of the beatification, the Croatian-Australian artist Charles Billich was commissioned to paint MacKillop's official commemorative.

On 19 December 2009, the Congregation for the Causes of Saints issued a papal decree formally recognising a second miracle, the complete and permanent cure of Kathleen Evans of inoperable lung and secondary brain cancer in the 1990s. Her canonisation was announced on 19 February 2010 and subsequently took place on 17 October 2010. This made her the first Australian saint.