The daughter of George Francis and Agnes (née Sheehan) Baillieu Margery Myer was born into one of Melbourne's leading stockbroker and real estate families. She attended Cromarty Girls' School, and the University of Melbourne. On 8 January 1920, aged 20, Merlyn became the second wife of Melbourne retail businessman Sidney Myer (later Sir Sidney). Originally named Simcha Baevski, Sidney Myer arrived in Australia as a penniless Russian immigrant. Myer was an entrepreneur, who founded a retail company that was listed on the Melbourne Stock Exchange during the 1920s.

Michael Myer, in his address to the Annual General Meeting of Philanthropy Australia, on 13 April 1999, states that 'the most significant influence on his [Sidney's] life from the time they met was my grandmother, Merlyn, and their love for one another.' Merlyn divided her time between business and pastoral interests. She was a member of the Board of Management for the Royal Melbourne Hospital and a member of the National Council of the Australian Red Cross Society.

Along with her husband, Merlyn became a generous benefactor and she continued her involvement after Sidney's death in 1934. She was the motivation for the establishment of the Sidney Myer Music Bowl, in 1959, as a gift to the people of Victoria. The Bowl became the home for the Sidney Myer free concert series, which commenced in 1929 as free open-air concerts by the Melbourne Symphony Orchestra. The Orchestra had been founded with a grant given by the Myers to the University of Melbourne.

Individually Merlyn and Sidney Myer are credited with making significant contributions to the development of The Royal Melbourne Hospital. Dame Merlyn Myer's years of service to the hospital is acknowledged in the new education centre.

The Merlyn Theatre at the Malthouse theatre complex in Melbourne has been named in her honour to mark the generosity of the Sidney Myer Fund, The Myer Foundation and the individual members of the Myer family who supported The Malthouse conversion.

The couple's four children, Neilma (later Neilma Gantner), Sidney Baillieu (Bails) Marigold (later Lady Southey) and Kenneth (Ken) and their off-spring have continued with the family philanthropic tradition.