Although he was born in Barrow-in-Furness in England, Kneale's family were from the Isle of Man; they returned there shortly afterwards, where Kneale was brought up in the capital, Douglas. His father was the editor of the local newspaper, and his brother Bryan is a renowned sculptor. Kneale enjoyed life on the island, but a skin condition meant that the weather there did not suit him and in 1947 he left for England.

After initially pursuing a career as an actor, Kneale decided to switch to writing after "a season carrying spears at Stratford-upon-Avon" convinced him he would never make it very far as a performer. He began working in prose, in 1950 winning the Somerset Maugham Award for his collection of short stories, Tomato Cain and Other Stories..

He had first moved into broadcasting when he began writing plays for BBC Radio in 1948, subsequently concentrating on script work and becoming one of the first permanent staff drama writers for BBC Television. His first television work, on the play Arrow to the Heart, was broadcast in July 1952. He quickly forged a reputation as one of the premier scriptwriters of BBC Television, and in 1953 teamed up with noted television director Rudolph Cartier – who had written Arrow to the Heart before Kneale had been brought in to polish up the script – to create the legendary science-fiction serial The Quatermass Experiment.

Lasting for six weeks over July and August, The Quatermass Experiment tells the story of Professor Bernard Quatermass of the British Experimental Rocket Group, and the consequences of him sending the first manned mission into space when a terrible fate befalls the crew and only one returns. It was a huge popular and critical success, and Cartier and Kneale became the No. 1 team of BBC drama.

They worked on literary adaptations of Wuthering Heights and most famously Nineteen Eighty-Four together, in the latter case creating a television production which became almost as famous as the book itself, being labelled both horrific and subversive, provoking death threats and raising questions in Parliament.

A second Quatermass serial, Quatermass II, arrived in 1955, the same year in which Hammer released their adaptation of the Professor's first outing, The Quatermass Xperiment, the spelling changed to play on the film's X-certificate for its horrific content. Kneale, who had been unable to work on the adaptation himself due to his BBC staff contract, was displeased with the film.

Soon after this he left the BBC, and was thus able to pen the screenplays of both the Hammer adaptation, Quatermass 2, and their version of another of his BBC collaborations with Cartier, The Creature, filmed as The Abominable Snowman.

Despite no longer being on the staff of the BBC he still wrote for them, in 1958 penning what many believe to be the greatest of all the Quatermass serials, Quatermass and the Pit. A sophisticated tale of racial tension, the origins of mankind and primaeval fears, it drew much critical acclaim and a huge audience for the time, allegedly emptying the pubs on the night of its final episode. There was no way Kneale could top that, and it proved to be the character's last BBC television outing, although Hammer did produce a film adaptation of Quatermass and the Pit, again with Kneale adapting his own script, in 1967.

Kneale married the scriptwriter Judith Kerr in 1954, and they had two children. Their son Matthew Kneale is a distinguished writer himself, winning the Book of the Year prize at the prestigious Whitbread Book Awards in 2000 for the novel English Passengers. Their daughter, Tacy (not Tracy as occasionally misreported) Kneale, works in the special effects industry, and has worked on the popular Harry Potter films.

He lived in Barnes, London, until his death on October 29, 2006 at the age of 84 following a series of small strokes