Born in Reigate, Surrey, the son of Admiral Sir Arthur Palliser, he received his education at Wellington College and Merton College, Oxford. Appointed a Second Lieutenant 21 November 1942, he served in the Coldstream Guards during World War II. In 1947, he joined the British Diplomatic Service and held a number of appointments at home and abroad including Head of the Policy Planning Staff, Private Secretary to the Prime Minister, Minister at the British Embassy in Paris, Ambassador and Permanent Representative to the European Communities, and, from 1975–1982, Permanent Under-Secretary of State and Head of the Diplomatic Service. From April to July 1982, during the Falklands campaign, he served as Special Adviser to the Prime Minister in the Cabinet Office.
He was appointed a member of the Privy Council in 1983. That same year, he joined the board of the London investment bank Samuel Montagu & Co., a subsidiary of the Midland Bank, of which he became a deputy chairman. He was chairman of Samuel Montagu from 1984–1993, then vice chairman until his retirement in 1996.
From 1983–1992, he was non-executive director of several industrial companies. From 1986–1994, he was a member of the board of the Royal National Theatre. Sir Michael served on the faculty of many Salzburg Seminar Sessions.
In 1948, Sir Michael married Marie Marguerite Spaak, daughter of Belgian statesman Paul-Henri Spaak. They had three sons: Anthony, a painter, Peter, a screenwriter, and Nicholas, a communication executive consultant.
- Knight of the Order of Orange Nassau with Swords (1947)
- Companion of the Order of St. Michael and St. George (1966)
- Knight Commander of the Order of St. Michael and St. George (1973)
- Knight Grand Cross of the Order of St. Michael and St. George (1977)
- Her Majesty's Most Honourable Privy Council (1983)
- David Hannay (20 June 2012). "Sir Michael Palliser | Politics". The Guardian. Retrieved 21 June 2012.
- "Sir Michael Palliser". The Telegraph. 20 June 2012. Retrieved 21 June 2012.
- Levens, R.G.C., ed. (1964). Merton College Register 1900-1964. Oxford: Basil Blackwell. p. 318.
- "No. 35830". The London Gazette (Supplement). 18 December 1942. p. 5552.
- "No. 49375". The London Gazette (Supplement). 10 June 1983. p. 1.
- "No. 37961". The London Gazette (Supplement). 20 May 1947. p. 2289.
- "No. 44004". The London Gazette (Supplement). 3 June 1966. p. 6532.
- "No. 45860". The London Gazette (Supplement). 29 December 1972. p. 4.
- "No. 47102". The London Gazette (Supplement). 30 December 1976. p. 3.
- PALLISER, Rt Hon. Sir (Arthur) Michael International Who's Who. accessed 1 September 2006.
- Interview with Sir Arthur Michael Palliser & transcript, British Diplomatic Oral History Programme, Churchill College, Cambridge, 1999