Emilie Rose Macaulay was born on 1 August 1881, daughter of George Campbell Macaulay (1852–1915), then assistant master at Rugby School and his wife Grace Mary (1855–1925), daughter of Rev. William John Conybeare. After spending her early life in Liguria she attended Oxford high school and Somerville College Oxford. In 1905 George succeeded Israel Gollancz as lecturer in English at Cambridge and the family moved to Great Shelford in Cambridgeshire. Her first novel, Abbots Verney, appeared in 1906, and she published six more novels by 1914. The Lee Shore, her fifth novel, was awarded first prize in a competition organised by the publishers Hodder & Stoughton; the prize money, together with financial help from her uncle and godfather, Reginald Macaulay, who had also provided her with funds for university, enabled her to buy her own flat in London. She then began to move in literary circles.
She worked as a nurse and a land girl in the early years of the First World War, becoming a civil servant in the War Office with responsibility for conscientious objectors and exemptions from service. In 1918 she was transferred to the new Ministry of Information, working as secretary to the head of the Italian section, Gerald O'Donovan (1871–1942), with whom she formed a close friendship; despite Macaulay's religious and moral scruples about his marriage, this developed after two years into a relationship which lasted until his death though he never left his family .
Macaulay worked for the publishers Constable & Co. after the war, and the novels she wrote in the 1920s won her much popularity; she also began to write regularly for the press, and her books of essays A Casual Commentary (1925) and Catchwords and Claptrap expressed the pleasure she took in, and her concern for precise use of, the English language. Her work took a more academic turn in the 1930s, when she published Some Religious Elements in English Literature (1931), a novel about the circle of Robert Herrick, They Were Defeated (1932), and a biography of Milton (1934). She wrote little during the Second World War: she was a voluntary part-time ambulance driver for almost three years; her flat was bombed in May 1941 and all her possessions destroyed; and in 1941 Gerald O'Donovan was diagnosed with terminal cancer, dying in July 1942.
After the second world war, works such as They Went to Portugal (1946) and Fabled Shore (1949) established her as a writer on travel. She returned to novel-writing in 1950 with The World My Wilderness, and in 1956 produced her most famous novel, The Towers of Trebizond (1956), partly inspired by a trip to Turkey in 1954. She received a honorary LittD from Cambridge University in 1951, and in 1958 was made a DBE. On 30 October of that year she died suddenly from a heart attack at her home, 20 Hinde House, London W1.
Two volumes of her correspondence with the Revd J. H .C. Johnson from 1950-1958, which aided her return to the Church of England after a long estrangement, were published posthumously (1961 and 1962), as was a volume of letters to her sister Jean along with a fragment of the novel she was working on at her death (1964); these books were all edited by Constance Babington Smith, who also published a biography in 1972. Macaulay's letters to her cousin Jean were published in 2011 as Dearest Jean: Rose Macaulay's Letters to a Cousin" edited by Martin Ferguson Smith.