Narayan moved to Mysore to live with his family when his father was transferred to the Maharajah's College High School. The well-stocked library at the school, as well as his father's own, fed his reading habit, and he started writing as well. After completing high school, Narayan failed the university entrance examination and spent a year at home reading and writing; he subsequently passed the examination in 1926 and joined Maharaja College of Mysore. It took Narayan four years to obtain his bachelor's degree, a year longer than usual. After being persuaded by a friend that taking a master's degree (M.A.) would kill his interest in literature, he briefly held a job as a school teacher; however, he quit in protest when the headmaster of the school asked him to substitute for the physical training master. The experience made Narayan realise that the only career for him was in writing, and he decided to stay at home and write novels. His first published work was a book review of Development of Maritime Laws of 17th-Century England. Subsequently, he started writing the occasional local interest story for English newspapers and magazines. Although the writing did not pay much (his income for the first year was nine rupees and twelve annas), he had a regular life and few needs, and his family and friends respected and supported his unorthodox choice of career. In 1930, Narayan wrote his first novel, Swami and Friends, an effort ridiculed by his uncle and rejected by a string of publishers. With this book, Narayan created Malgudi, a town that creatively reproduced the social sphere of the country; while it ignored the limits imposed by colonial rule, it also grew with the various socio-political changes of British and post-independence India.

Malgudi is a fictional, semi-urban town in southern India, conjured by Narayan. He created the town in September 1930, on Vijayadashami, an auspicious day to start new efforts and thus chosen for him by his grandmother. As he mentioned in a later interview to his biographers Susan and N. Ram, in his mind, he first saw a railway station, and slowly the name Malgudi came to him. The town was created with an impeccable historical record, dating to the Ramayana days when it was noted that Lord Rama passed through; it was also said that the Buddha visited the town during his travels. While Narayan never provided strict physical constraints for the town, he allowed it to form shape with events in the various stories, becoming a reference point for the Future. Dr James M. Fennelly, a scholar of Narayan's works, created a map of Malgudi based on the fictional descriptors of the town from the many books and stories.

While vacationing at his sister's house in Coimbatore, in 1933, Narayan met and fell in love with Rajam, a 15-year-old girl who lived nearby. Despite many astrological and financial obstacles, Narayan managed to gain permission from the girl's father and married her. Following his marriage, Narayan became a reporter for a Madras-based paper called The Justice, dedicated to the rights of non-Brahmins. The publishers were thrilled to have a Brahmin Iyer in Narayan espousing their cause. The job brought him in contact with a wide variety of people and issues. Earlier, Narayan had sent the manuscript of Swami and Friends to a friend at Oxford, and about this time, the friend showed the manuscript to Graham Greene. Greene recommended the book to his publisher, and it was finally published in 1935. Greene also counseled Narayan on shortening his name to become more familiar to the English-speaking audience. The book was semi-autobiographical and built upon many incidents from his own childhood. Reviews were favourable but sales were few. Narayan's next novel The Bachelor of Arts (1937), was inspired in part by his experiences at college, and dealt with the theme of a rebellious adolescent transitioning to a rather well-adjusted adult; it was published by a different publisher, again at the recommendation of Greene. His third novel, The Dark Room (1938) was about domestic disharmony, showcasing the man as the oppressor and the woman as the victim within a marriage, and was published by yet another publisher; this book also received good reviews. In 1937, Narayan's father died, and Narayan was forced to accept a commission from the government of Mysore as he was not making any money.

Narayan first broke through with the help of Graham Greene who, upon reading Swaminathan and Tate, took it upon himself to work as Narayan's agent for the book. He was also instrumental in changing the title to the more appropriate Swami and Friends, and in finding publishers for Narayan's next few books. While Narayan's early works were not commercial successes, other authors of the time began to notice him. Somerset Maugham, on a trip to Mysore in 1938, had asked to meet Narayan, but not enough people had heard of him to actually effect the meeting. Maugham subsequently read Narayan's The Dark Room, and wrote to him expressing his admiration. Another contemporary Writer who took a liking to Narayan's early works was E. M. Forster, an author who shared his dry and humorous narrative, so much so that Narayan was labeled the "South Indian E. M. Forster" by critics. Despite his popularity with the reading public and fellow Writers, Narayan's work has not received the same amount of critical exploration accorded to other Writers of his stature.

Rajam died of typhoid in 1939. Her death affected Narayan deeply and he remained depressed for a long time; he was also concerned for their daughter Hema, who was only three years old. The bereavement brought about a significant change in his life and was the inspiration behind his next novel, The English Teacher. This book, like his first two books, is autobiographical, but more so, and completes an unintentional thematic trilogy following Swami and Friends and The Bachelor of Arts. In subsequent interviews, Narayan acknowledges that The English Teacher was almost entirely an autobiography, albeit with different names for the characters and the change of setting in Malgudi; he also explains that the emotions detailed in the book reflected his own at the time of Rajam's death.

Bolstered by some of his successes, in 1940 Narayan tried his hand at a journal, Indian Thought. With the help of his uncle, a car salesman, Narayan managed to get more than a thousand subscribers in Madras city alone. However, the venture did not last long due to Narayan's inability to manage it, and it ceased publication within a year. His first collection of short stories, Malgudi Days, was published in November 1942, followed by The English Teacher in 1945. In between, being cut off from England due to the war, Narayan started his own publishing company, naming it (again) Indian Thought Publications; the publishing company was a success and is still active, now managed by his granddaughter. Soon, with a devoted readership stretching from New York to Moscow, Narayan's books started selling well and in 1948 he started building his own house on the outskirts of Mysore; the house was completed in 1953. Around this period, Narayan wrote the screenplay for the Gemini Studios film Miss Malini (1947), which remained the only screenplay by him that was successfully adapted into a feature film.

After The English Teacher, Narayan's writings took a more imaginative and creative external style compared to the semi-autobiographical tone of the earlier novels. His next effort, Mr. Sampath, was the first book exhibiting this modified approach. However, it still draws from some of his own experiences, particularly the aspect of starting his own journal; he also makes a marked movement away from his earlier novels by intermixing biographical events. Soon after, he published The Financial Expert, considered to be his masterpiece and hailed as one of the most original works of fiction in 1951. The inspiration for the novel was a true story about a financial genius, Margayya, related to him by his brother. The next novel, Waiting for the Mahatma, loosely based on a fictional visit to Malgudi by Mahatma Gandhi, deals with the protagonist's romantic feelings for a woman, when he attends the discourses of the visiting Mahatma. The woman, named Bharti, is a loose parody of Bharati, the personification of India and the focus of Gandhi's discourses. While the novel includes significant references to the Indian independence movement, the focus is on the life of the ordinary individual, narrated with Narayan's usual dose of irony.

In 1953, his works were published in the United States for the first time, by Michigan State University Press, who later (in 1958), relinquished the rights to Viking Press. While Narayan's writings often bring out the anomalies in social structures and views, he was himself a traditionalist; in February 1956, Narayan arranged his daughter's wedding following all orthodox Hindu rituals. After the wedding, Narayan began travelling occasionally, continuing to write at least 1500 words a day even while on the road. The Guide was written while he was visiting the United States in 1956 on the Rockefeller Fellowship. While in the U.S., Narayan maintained a daily journal that was to later serve as the foundation for his book My Dateless Diary. Around this time, on a visit to England, Narayan met his friend and mentor Graham Greene for the first time. On his return to India, The Guide was published; the book is the most representative of Narayan's writing skills and elements, ambivalent in expression, coupled with a riddle-like conclusion. The book won him the Sahitya Akademi Award in 1958.

Narayan won numerous awards during the course of his literary career. His first major award was in 1958, the Sahitya Akademi Award for The Guide. When the book was made into a film, he received the Filmfare Award for the best story. In 1964, he received the Padma Bhushan during the Republic Day honours. In 1980, he was awarded the AC Benson Medal by the (British) Royal Society of Literature, of which he was an honorary member. In 1982 he was elected an honorary member of the American Academy of Arts and Letters. He was nominated for the Nobel Prize in Literature multiple times, but never won the honour.

Occasionally, Narayan was known to give form to his thoughts by way of essays, some published in newspapers and journals, others not. Next Sunday (1960), was a collection of such conversational essays, and his first work to be published as a book. Soon after that, My Dateless Diary, describing experiences from his 1956 visit to the United States, was published. Also included in this collection was an essay about the writing of The Guide.

Narayan's next novel, The Man-Eater of Malgudi, was published in 1961. The book was reviewed as having a narrative that is a classical art form of comedy, with delicate control. After the launch of this book, the restless Narayan once again took to travelling, and visited the U.S. and Australia. He spent three weeks in Adelaide, Sydney and Melbourne giving lectures on Indian literature. The trip was funded by a fellowship from the Australian Writers' Group. By this time Narayan had also achieved significant success, both literary and financial. He had a large house in Mysore, and wrote in a study with no fewer than eight windows; he drove a new Mercedes-Benz, a luxury in India at that time, to visit his daughter who had moved to Coimbatore after her marriage. With his success, both within India and abroad, Narayan started writing columns for magazines and newspapers including The Hindu and The Atlantic.

In 1964, Narayan published his first mythological work, Gods, Demons and Others, a collection of rewritten and translated short stories from Hindu epics. Like many of his other works, this book was illustrated by his younger brother R. K. Laxman. The stories included were a selective list, chosen on the basis of powerful protagonists, so that the impact would be lasting, irrespective of the reader's contextual knowledge. Once again, after the book launch, Narayan took to travelling abroad. In an earlier essay, he had written about the Americans wanting to understand spirituality from him, and during this visit, Swedish-American Actress Greta Garbo accosted him on the topic, despite his denial of any knowledge.

Recognition also came in the form of honorary doctorates by the University of Leeds (1967), the University of Mysore (1976) and Delhi University (1973). Towards the end of his career, Narayan was nominated to the upper house of the Indian Parliament for a six-year term starting in 1989, for his contributions to Indian literature. A year before his death, in 2001, he was awarded India's second-highest civilian honour, the Padma Vibhushan.

Narayan's book The Guide was adapted into the Hindi film Guide, directed by Vijay Anand. An English-language version was also released. Narayan was not happy with the way the film was made and its deviation from the book; he wrote a column in Life magazine, "The Misguided Guide," criticising the film. The book was also adapted to a Broadway play by Harvey Breit and Patricia Rinehart, and was staged at Hudson Theatre in 1968 with Zia Mohyeddin playing the lead role and a music score by Ravi Shankar.

Narayan was commissioned by the government of Karnataka to write a book to promote tourism in the state. The work was published as part of a larger government publication in the late 1970s. He thought it deserved better, and republished it as The Emerald Route (Indian Thought Publications, 1980). The book contains his personal perspective on the local history and heritage, but being bereft of his characters and creations, it misses his enjoyable narrative. The same year, he was elected as an honorary member of the American Academy of Arts and Letters and won the AC Benson Medal from the Royal Society of Literature. Around the same time, Narayan's works were translated to Chinese for the first time.

Malgudi evolved with the changing political landscape of India. In the 1980s, when the nationalistic fervor in India dictated the changing of British names of towns and localities and removal of British landmarks, Malgudi's mayor and city council removed the long-standing statue of Frederick Lawley, one of Malgudi's early residents. However, when the Historical Societies showed proof that Lawley was strong in his support of the Indian independence movement, the council was forced to undo all their earlier actions. A good comparison to Malgudi, a place that Greene characterised as "more familiar than Battersea or Euston Road", is Faulkner's Yoknapatawpha County. Also, like Faulkner's, when one looks at Narayan's works, the town gets a better definition through the many different novels and stories.

In 1983, Narayan published his next novel, A Tiger for Malgudi, about a tiger and its relationship with humans. His next novel, Talkative Man, published in 1986, was the tale of an aspiring Journalist from Malgudi. During this time, he also published two collections of short stories: Malgudi Days (1982), a revised edition including the original book and some other stories, and Under the Banyan Tree and Other Stories, a new collection. In 1987, he completed A Writer's Nightmare, another collection of essays about topics as diverse as the caste system, Nobel prize winners, love, and monkeys. The collection included essays he had written for newspapers and magazines since 1958.

In 1990, he published his next novel, The World of Nagaraj, also set in Malgudi. Narayan's age shows in this work as he appears to skip narrative details that he would have included if this were written earlier in his career. Soon after he finished the novel, Narayan fell ill and moved to Madras to be close to his daughter's family. A few years after his move, in 1994, his daughter died of cancer and his granddaughter Bhuvaneswari (Minnie) started taking care of him in addition to managing Indian Thought Publications. Narayan then published his final book, Grandmother's Tale. The book is an autobiographical novella, about his great-grandmother who travelled far and wide to find her husband, who ran away shortly after their marriage. The story was narrated to him by his grandmother, when he was a child.

In May 2001, Narayan was hospitalised. A few hours before he was to be put on a ventilator, he was planning on writing his next novel, a story about a grandfather. As he was always very selective about his choice of notebooks, he asked N. Ram to get him one. However, Narayan did not get better and never started the novel. He died on 13 May 2001, in Chennai at the age of 94.

Narayan's greatest achievement was making India accessible to the outside world through his literature. He is regarded as one of the three leading English language Indian fiction Writers, along with Raja Rao and Mulk Raj Anand. He gave his readers something to look forward to with Malgudi and its residents and is considered to be one of the best novelists India has ever produced. He brought small-town India to his audience in a manner that was both believable and experiential. Malgudi was not just a fictional town in India, but one teeming with characters, each with their own idiosyncrasies and attitudes, making the situation as familiar to the reader as if it were their own backyard. In 2014, Google commemorated Narayan's 108th birthday by featuring a doodle showing him behind a copy of Malgudi Days.

In mid-2016, Narayan's former home in Mysore was converted to a museum in his honor. The original structure was built in 1952. The house and surrounding land was acquired by real estate contractors to raze down and build an apartment complex in its stead but citizens groups and the Mysore City Corporation stepped in to repurchase the building and land and then restore it, subsequently converting it to a museum.

Narayan's mentor and friend Graham Greene was instrumental in getting publishers for Narayan’s first four books including the semi-autobiographical trilogy of Swami and Friends, The Bachelor of Arts and The English Teacher. The fictional town of Malgudi was first introduced in Swami and Friends. Narayan’s The Financial Expert was hailed as one of the most original works of 1951 and Sahitya Akademi Award winner The Guide was adapted for film and for Broadway.