Mary was born on February 20, 1861, in Indigo, Victoria, Australia. She was the eldest daughter of William Henry Gaunt and Elizabeth Palmer. Her father, an English-born civil servant, supported the family by working as a magistrate in the Australian gold fields. One of his chief responsibilities was to protect Chinese workers from racial violence. As a result of her father’s work, Gaunt was keenly aware of racial divisions from an early age. This knowledge would become the central focus of several novels later in Gaunt’s life.