Yuan Mei was born in Qiantang (錢塘, in modern Hangzhou), Zhejiang province. He achieved the degree of jinshi at a young age and entered the Hanlin Academy (翰林院). After a succession of various minor posts, Yuan Mi resigned his post in 1748 and returned to his hometown to pursue his literary interest.
In the decades before his death, Yuan Mei produced a large body of poetry, essays and paintings. His works reflected his interest in Chan Buddhism and the supernatural, at the expense of Daoism and institutional Buddhism - both of which he rejected. Yuan is most famous for his poetry, which have been described as "unusually clear and elegant language". His views on poetry as expressed in the Suiyuan shihua (隨園詩話) stressed the importance of personal feeling and technical perfection. In his later years, Yuan Mei came to be called "Mister Suiyuan" (隨園先生). Among his other collected works are treatises on passing the imperial examinations and food.
Throughout his lifetime, Yuan Mei travelled extensively throughout southern China, visiting Huangshan, Guilin, Tiantai, Wuyi and other famous mountains. On some of those visits, Yuan kept journal entries, representative of which is the You Guilin zhu shan ji ("Record of tours of the mountains of Guilin"). He also accepted students. Since he admired women's poetry, he also took several female students and helped them publish their work under their own names.