Born in Sonoma, California, Mary Marguerite Dill Henry studied at the California College of the Arts (then called the California School of Arts and Crafts) in Oakland, California between 1933 and 34 , where her teachers included modernists Ethel Abeel, Glen Wessels, and Marie Togni. She won a prize in a printmaking contest sponsored by Iowa State University (Ames, Iowa), and was invited there to teach applied art in their home economics department. Her "childhood sweetheart" Wilbur Henry "reluctantly" agreed to marry her and accompany her to Iowa, where he completed a master's degree in entomology while she taught.

During World War II, back in California while her husband served in the military, Henry studied lithography at San Francisco School of Fine Arts and worked drafting engineering drawings at Hewlett-Packard; this drafting experience would later allow her to draw uncommonly straight lines freehand in executing her paintings.

In 1939 in Berkeley, California, Henry attended a lecture by Bauhaus artist László Moholy-Nagy. This led to her studying with him at the Institute of Design in Chicago in 1945, leaving her daughter Suzanne in California with Henry's mother. She studied drawing, architectural drawing, photography, texture, and sculpture; her work was so good as to result in a job offer—the first that the institute had ever made to a woman—but she decided upon her husband's discharge from the military that she had to follow him to Arkansas where he had accepted a job with the U.S. Public Health Service, fighting malaria.

Henry traveled to Europe in 1962; she was divorced in 1964, which marks the beginning of her career as a mature artist. She lived in Mendocino, California, running a bed-and-breakfast and painting. Matthew Kangas writes, "It was as if, after 20 years of fulfilling conventional expectations as a wife, worker, and mother, she was released into a constant stream of creative production, capturing the exuberant hedonism of Northern California, while reined in by the consummate formal control she had assimilated as an American Constructivist in Chicago." Her 1968 show at Arleigh Gallery in San Francisco resulted in a write-up in Artforum.

In 1976, Henry traveled to Alaska before settling in Washington, where she lived after 1981 on Whidbey Island.  In 1976, at Centrum in Port Townsend, Washington, she attended a master painter's class with Jack Tworkov, then in his seventies. Tworkov remarked the affinity between their work; according to Kangas, the "linear precision and complexity" of Tworkov's late work owes a great deal to Henry; he, in turn, greatly encouraged her in her work. Henry still made art until about 2003, but she ceased painting in her early 90s when she could no longer stretch her own canvases.

Mary Dill Henry died on May 20, 2009 in Coupeville, Whidbey Island, Washington.