After the war, they were reunited and married, and in 1950 they bought the Hampstead house together with Jerry’s mother, his sister Beta and her husband Chris (the two men had met in the P.O.W. camp). When Donaldson was six her father contracted polio and thereafter was confined to a wheelchair, though he still led an active life, working as a lecturer in the Maudsley Hospital’s Institute of Psychiatry, where he pioneered genetic studies using the model of identical twins brought up apart.

Donaldson studied Drama and French at Bristol University (1967–1970), graduating with a 2:1 honours degree. During her time there she acted in departmental productions and learnt the guitar. In 1968, she and her friend Maureen Purkis took part in the play I am not the Eiffel Tower with music composed by Colin Sell, an accomplished young pianist who was studying Spanish and Portuguese at Bristol and who has gone on to appear in BBC Radio 4’s I’m Sorry I Haven’t a Clue. Sell’s roommate Malcolm Donaldson, a medical student who played left-handed guitar and was a keen amateur actor, came to see the show and subsequently teamed up with Sell, Donaldson and Purkis to sing in the pubs during Bristol University Rag Week in early 1969. Almost immediately after this Donaldson and Purkis were seconded to live in Paris for six months as part of their degree course where they sang and played their guitars to café audiences for money. Malcolm joined them in the summer and the trio performed various songs by the Beatles and from musicals including Hair.

By December 1969 Julia and Malcolm had become an item. They began to supply cabaret for the occasional university social event, and in 1970 they visited America, travelling by Greyhound bus from the East to the West coast and busking in Seattle and San Francisco. On their return the duo played in restaurants and began to participate in events as diverse as the Crystal Palace Children’s Day, an Easter Parade in London and a dental congress dinner – with Julia Donaldson composing songs specially for these occasions.

The couple were married in September 1972, Donaldson composing an operetta which she and Malcolm, their best man Colin Sell, the bridesmaids and ushers performed at the reception in Burgh House, Hampstead. A picture of the wedding is on display in the house today. Donaldson then worked as a secretary in Radio Bristol where she also had a weekly slot as short story producer/editor. In August 1974 the couple moved to Brighton where Donaldson had been appointed as editor at Robert Tyndall, a small book publishers. Shortly before this she had sent a tape of songs to BBC Children’s Television, and between 1974 and 1978 she wrote regularly for the programme Play Away, her songs being performed by actors and musicians including Toni Arthur, Floella Benjamin, Johnny Ball, Brian Cant, Derek Griffiths and musical director Jonathan Cohen. She also wrote occasional songs for Play School and for the Watch with Mother programme Play Board. Some of Donaldson’s songs – “The Luck of the Game”, “Funny Face” and “A Squash and a Squeeze” – were recorded at this time for BBC albums.

In 1977/6 Donaldson studied at Brighton College of Education for a Postgraduate Certificate in Education and worked for two years as an English teacher at St Mary’s Hall in Brighton until the arrival of their first child Hamish in 1978, after which she never returned to full-time employment. The couple moved to Lyon in France for a year (1979–80) with Hamish, returning to Brighton where their second son Alastair was born in 1981.

In 1983 the family of four moved to Bristol where Malcolm Donaldson was appointed as Senior Registrar in Paediatrics to United Bristol Hospitals. By then the television writing had dried up and the folk scene had waned. Julia Donaldson wrote and sang a few topical songs for adult radio programmes (including one about the Guinness Distillers take-over bid, which appeared on Financial World Tonight), did occasional amateur acting and street theatre, and wrote the songs for the Kingsdown community play Nine Trees Shade. She also became a volunteer in Hamish’s primary school, hearing the children read aloud. She devised short plays with the right number of parts for a reading group, rotating the roles until each child had read the whole play. The piece would then be performed to the entire class. This approach seemed to build confidence in reading aloud as well as being enjoyable, and Donaldson stored the plays in a drawer for possible future use.

In 1989 Malcolm was appointed to Glasgow University as senior lecturer in child health and the family, now five following the arrival of Jesse in 1987, moved to Bearsden.

In 1991 Donaldson was contacted by Methuen Publishing to ask if the words of her song “A Squash and a Squeeze”, which she had written for the BBC’s Playboard programme in 1975, could be made into a picture book for children. The book was published in 1993, with illustrations by a German artist Axel Scheffler, who was living in London. Publication of A Squash and a Squeeze was a pivotal event for Donaldson . It made her realise that her song-writing talent could be applied to story-writing, and gave her the confidence to open her drawer of simple plays for schoolchildren and to send some samples to an educational publisher. Between 1993 and 1999 she wrote extensively for Heinemann and Ginn, including plays such as Birthday Surprise for younger classes and Top of the Mops for reluctant teenage readers, as well as re-tellings of traditional tales. During this time Donaldson started visiting Scottish schools and libraries, occasionally accompanied by Malcolm Donaldson and his guitar.

In 1995, while looking for ideas for an educational series of plays based on traditional tales, Donaldson came across a version of a Chinese story about a little girl who escapes being eaten by a tiger by claiming to be the fearsome Queen of the Jungle and inviting him to walk behind her. The tiger misinterprets the terror of the various animals they meet as being related to her rather than him, and flees. Donaldson sensed that this story could be developed into more than an educational item and returned to it later as a possible basis for a picture book. She decided to make the girl a mouse, and chose a fox, owl and snake as woodland rather than jungle creatures but wasn’t satisfied with lines like “They ought to know, they really should / There aren’t any tigers in this wood”.

The Gruffalo was sent to Reid Books in 1995. Donaldson sent the text to Axel Scheffler, whom she had met only once or twice, briefly, following the publication of A Squash and a Squeeze. Within days Macmillan Children’s Books made an offer to publish The Gruffalo, which was illustrated by Scheffler and published in 1999.

The Gruffalo was an immediate success, going on to win several awards, including the Smarties Prize (1999). It has subsequently been translated into more than 40 languages, sold over 10 million copies worldwide, and has given rise to stage and screen productions by Tall Stories and Magic Light Pictures. The Gruffalo was followed by more Donaldson/Scheffler publications by Macmillan: Monkey Puzzle (2000), Room on the Broom (2001), The Smartest Giant in Town (2002), The Snail and the Whale (2003), The Gruffalo’s Child, featuring an only child Gruffalo with a wooden stick doll plus the original cast of Gruffalo, Mouse, Fox, Snake and Owl (2004), and Charlie Cook’s Favourite Book (2005). In 2006 Scheffler moved to Alison Green Books who published the duo’s Tiddler (2007), Stick Man (inspired by the Gruffalo’s Child’s toy) (2008), Tabby McTat (2009), Zog (2010), The Highway Rat (2011), Superworm (2012) and The Scarecrows’ Wedding (2014).

Donaldson has also performed jointly with her illustrators, particularly Axel Scheffler and Lydia Monks. She has performed the Donaldson/Scheffler books not only in English but also in German on several tours and at the Berlin Festival. In 2007, when Malcolm took a sabbatical from his job, he joined Julia on a World Tour, acting and singing in Bermuda, New Zealand, Australia, Hong Kong, Singapore, Korea and America.

Donaldson is also the author of The Giants and the Joneses for children aged 8–12 years. Her teenage novel Running on the Cracks is set in Glasgow and traces the adventures of orphaned half-Chinese Leo (aged 15) who is fleeing from her dodgy uncle in England and trying to find her father’s estranged family. She befriends a schoolboy called Finlay, who is loosely based on Donaldson’s youngest son Jerry during his days as a paper boy. Running on the Cracks, whose element of mental illness is drawn from Hamish’s hospital experiences won the Nasen award in 2011 for its sympathetic and inclusive portrait of Mary, who befriends Leo but then descends into a severe relapse of her bi-polar condition.

In 2011, Donaldson was appointed Children’s Laureate succeeding the illustrator Anthony Browne. In keeping with her interest in acting and singing Donaldson has set out to encourage children to perform poetry, plays and dramatised readings to generate a love of books and of reading. Accordingly, she has created a series of Plays to Read for six characters to be performed in the classroom, written by herself and by other writers such as Geraldine McCaughrean, Jeanne Willis, Vivian French, Steve Skidmore and Steve Barlow. The first 36 of these plays, for early readers, were published by Pearson (2013) with a further 24 plays for older primary-school children to following later in the year. She has also compiled an anthology of Poems to Perform by groups of children (to be published by Macmillan in 2013) and has created an interactive website called picturebookplays.co.uk which gives guidance as to how selected picture books can be turned into classroom plays.

She was appointed Member of the Order of the British Empire (MBE) in the 2011 Birthday Honours for services to literature. She was promoted to Commander of the Order of the British Empire (CBE) in the 2019 New Year Honours.

She was awarded honorary doctorates by the University of Bristol in 2011 and the University of Glasgow in 2012.

In her laureate role Donaldson has campaigned passionately against library cuts and closures, writing articles, meeting ministers and – with Malcolm Donaldson – embarking on a 6-week tour of UK libraries in autumn 2012. In all of the 38 libraries the visiting children were requested to perform a short play or song based on a picture book, as well as joining in Donaldson’s own stories and songs. The tour was designed to celebrate libraries but also to generate publicity about the plight of some of them.

Donaldson’s husband is a consultant paediatrician. The couple previously resided in Bearsden, East Dunbartonshire and, in 2014, moved to Steyning, West Sussex. The eldest of the Donaldson’s three sons, Hamish, took his own life in 2003 at the age of 25.