Callil was born July 15, 1938 in Melbourne, Victoria, Australia to Frederick Alfred Louis Callil and Lorraine Claire Allen. She was educated at Star of the Sea Convent, Gardenvale, and Loreto Convent Mandeville Hall. Following matriculation from high school, she enroled at the University of Melbourne, where she graduated in Arts, and relocated to the United Kingdom in 1960. Shortly after moving, Callil attempted suicide after a failed relationship with a married man. Carmen Callil's mother was of Irish/English descent, her father of Lebanese extraction. He was a Barrister and Lecturer in French at the University of Melbourne, and died when she was nine years old. She was a Director of Channel 4 Television from 1985 to 1991.
In 2006, she published Bad Faith: A Forgotten History of Family and Fatherland, a biography of Vichy figure Louis Darquier, whose daughter, the London psychiatrist Anne Darquier, had, until her suicide in 1970, been treating Callil since the latter's attempted suicide.