McAuley came to prominence in the wake of the 1943-44 Ern Malley hoax. With fellow poet Harold Stewart, McAuley concocted sixteen nonsense poems in a pseudo-experimental modernist style. These were then sent to the young editor of the literary magazine Angry Penguins, Max Harris. The poems were raced to publication by Harris and Australia’s most celebrated literary hoax[discuss] was set in motion.
In 1952 he converted to Roman Catholicism, the faith his own father had abandoned. This was in the parish of St Charles at Ryde. He was later introduced to Australian musician Richard Connolly by a priest, Ted Kennedy, at the Holy Spirit parish at North Ryde and the two subsequently collaborated to produce between them the most significant collection of Australian Catholic hymnody to date, titled "Hymns for the Year of Grace". Connolly was McAuley's sponsor for his confirmation into the Roman Catholic Church. In his undergraduate years McAuley was influenced by both communism and anarchism, but although a man of the left[discuss], McAuley remained staunchly anti-communist throughout his later life. In 1956 he and Richard Krygier founded the literary and cultural journal, Quadrant and was chief editor until 1963. From 1961 he was professor of English at the University of Tasmania.