Born into an Irish Catholic family, Michael Duffy is one of six siblings. He received his early education from Dominican nuns and Christian brothers, and his tertiary education from Macquarie University, gaining a Bachelor of Arts in English in 1978. During his university years Duffy joined an anarchist group and run a bookshop. After completing his studies he pursued his musical interests, playing in punk rock bands in Australia and in England. In this period he worked as a motorcycle courier and public servant, and was later appointed delegate for two trade unions.
Duffy began his literary career as editor of the Independent Monthly magazine, a position he held between 1993 and 1996. In that year, he created the publishing company Duffy & Snellgrove in partnership with graphic artist Alexandra Snellgrove. The firm specialised in serious non-fiction books. In a 2005 Sydney Morning Herald column Duffy explained the company 'wanted to do books questioning the left-wing orthodoxy that dominated publishing then', but that it eventually had to cease operations following the negative impact of the Goods and Services Tax (GST) on the sale of books.
In 2003 Duffy published his first book, a biography entitled Man of Honour. Focusing on the life of second-fleeter and pioneer pastoralist in New South Wales John Macarthur, this would be his only work to explore a historical theme. Duffy has also written a political biography Latham and Abbott (2004) where he revisits the theme of public men he had first explored in Man of Honour. Duffy has been involved with political reporting both as a publisher and as a commentator in the press and on radio. As of 2004 Duffy and Paul Comrie-Thomson co-host Counterpoint, a weekly show on ABC's Radio National.
In 2009 he published the first in a series of crime novels featuring the Detective Nicholas Troy. In a 2011 article the author credited Michael Connelly and Simon Raven as his main influences within the crime genre. He also noted George Orwell, Vladimir Nabokov, and Les Murray as having had a general influence on his literary and political ideas.
Duffy's Call Me Cruel: A Story about Murder and the Dangerous Power of Lies (2012), an investigation into the murder of Kylie Labouchardiere, was shortlisted in the True Crime category of the 2012 Ned Kelly Awards.