Mahendra was born 11 June 1920 to King Tribhuvan Bir Bikram Shah of Nepal. Although Tribhuvan was nominally king since 1911, he was only window dressing for de-facto rule by the Rana dynasty of hereditary prime ministers, civil servants and army officers that had been in power since 1846. Mahendra was also captive in Narayanhiti Palace, virtually a gilded cage. In 1940 he married Indra Rajya Laxmi, daughter of General Hari Shamsher Rana. They had three sons, Birendra, Gyanendra, Dhirendra and three daughters Shanti, Sharada and Shobha. Queen Indra died in 1950. In 1952 Mahendra married Indra's sister Ratna Rajya Lakshmi Devi. This second marriage produced no children.

Meanwhile popular discontent and the British withdrawal from India in 1947 had made Rana rule increasingly untenable. In 1950 the political situation had deteriorated so far that the personal safety of the royals was in doubt. Tribhuvan and most of his family escaped to India. Open revolt ensued and by the end of the year the Ranas agreed to a coalition government under Tribhuvan in which they shared power equally with the Nepali Congress Party. By the end of the year the Ranas were maneuvered out and Nepal's first experiment with democratic government under constitutional monarchy was underway, however Tribhuvan's health was poor and he died in 1955.

Mahendra was crowned on May 2, 1956. He succeeded Tribhuvan as king of Nepal. On 15 December 1960 he suspended the constitution, dissolved parliament, dismissed the cabinet, imposed direct rule and imprisoned then prime minister Bishweshwar Prasad Koirala and his closest government colleagues. Mahendra instituted a Panchayat hierarchical system of village, district and national councils, a variant of guided democracy. He pursued a foreign policy of neutrality between China and India. Mahendra was made a British Field Marshal in 1960. Mahendra implemented a land reform policy, which provided land to many landless people. The Mahendra Highway (also called East-West Highway) that runs along the entire Terai belt in southern Nepal was constructed during his reign. He played a key role in making Nepal a member of the United Nations.

Mahendra suffered a heart attack while hunting in Chitwan with Tiger Tops Hotel proprietor John Coapman, also associated with the CIA at the time, who reported in 1977 that Mahendra died in his arms after eating dinner "on shikar" and died 31 January 1972 in Bharatpur. His son Birendra assumed the throne on 24 February 1975 but died 1 June 2001 along with siblings Dhirendra, Shanti and Sharada in the Nepalese royal massacre. Shobha was wounded but survived and Gyanendra was not present. As of May 2010 Mahendra is also survived by his widow, Queen Mother Ratna.