She was born as Margaret Mary Tew in San Remo, Italy to Gilbert and Phyllis Tew; her father was in the British colonial service. Her mother was a devout Roman Catholic and Mary and her younger sister, Patricia, were raised in that faith. After their mother's death the sisters were raised by their maternal grandparents and attended the Roman Catholic Sacred Heart Convent in Roehampton (later Woldingham School). Mary went on to study at the St Anne's College, Oxford from 1939 to 1943; there she was influenced by E.E. Evans-Pritchard.

She worked in the British Colonial Office until 1947, when she returned to Oxford to take up graduate study she had left. She studied with M. N. Srinivas as well as Edward Evans-Pritchard. In 1949 she did field work with the Lele people in what was then the Belgian Congo; this took her to village life in the region between the Kasai River and the Loange River, where the Lele lived on the edge of the previous Kuba kingdom.

In the early 1950s she completed her doctorate, married James Douglas and started a family of three children. She taught at University College, London, where she remained for around 25 years. She taught and wrote in the USA for 11 years. She published on such subjects as risk analysis and the environment, consumption and welfare economics, and food and ritual, all increasingly cited outside anthropology circles.

After four years (1977-81) as Foundation Research Professor of Cultural Studies at the Russell Sage Institute in New York, she moved to Northwestern University as Avalon Professor of the Humanities with a remit to link the studies of theology and anthropology. Her reputation was established by her book Purity and Danger (1966). She wrote The World of Goods (1978) with an econometrician, Baron Isherwood, which was considered a pioneering work on economic anthropology.

She became a Dame Commander of the Order of the British Empire in the Queen's New Year's Honours List, published on 30 December 2006. She died on 16 May 2007 in London, aged 86, from complications of cancer, survived by her three children. Her husband died in 2004.

Risk and danger are culturally conditioned ideas. They are shaped by pressures of social life and accepted notions of accountability. The risk analyses that are increasingly being utilised by politicians, aid programmes and business ignore the insights to be gained from social anthropology which can be applied to modern industrial society. In this collection of recent essays, Mary Douglas develops a programme for studying risk and blame that follows from ideas originally proposed in Purity and Danger. She suggests how political and cultural bias can be incorporated into the study of risk perception and in the discussion of responsibility in public policy.