Margaret Hannah Olley was born on 24 June 1923 in Lismore, New South Wales. After spending some of her childhood in remote Upper Tully, south of Cairns, Queensland, the family moved to Lower Tully where her sister Elaine and brother Ken were subsequently born.
Experiences like riding a pony to school helped foster an early sense of adventure and independence in the young artist. However, it was not until she attended , a Brisbane girl's boarding school, in 1935 that her talent for painting and drawing started receiving encouragement.
Olley's art teacher at Somerville House persuaded Olley's parents to send Margaret to art school. In 1941, she started at Brisbane Central Technical College.
The next year Olley moved to Sydney and enrolled at East Sydney Technical College, where her boarding school friend and fellow artist Margaret Cilento also attended. Olley graduated in 1945 with A-class honours.
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