Gahan was born in County Donegal; in 1900 her family moved to Castlebar, County Mayo. Travelling around Mayo with her father Townsend Gahan, who was a civil engineer, gave Muriel Gahan an insight into the depths of rural povery which existed in communities.
Gahan was educated at home under the care of a governess; she subsequently went to a girls' school on Wales and then returned to Ireland in 1914 to attend Alexandra College, where she met her lifelong friend and collaborator Olivia Cruikshank, later Hughes.
In 1927 Gahan embarked on a career as a painter and decorator with an all-female firm, the Modern Decorator, and through this work first came into contact with the United Irishwomen, a group founded in 1910 and which Gahan joined in 1929. The inspiration for the United Irishwomen came from the Co-operative Movement whose motto was “Better Farming, Better Business, and Better Living”. Speaking in 1910 the founder of the Co-operative Movement, Horace Plunkett, remarked that the better living would come from the women of Ireland. In 1935 the United Irishwomen changed their name to the Irish Countrywomen's Association.
Gahan left her job in 1930 and along with other United Irishwomen opened a sales depot in Dublin - called the Country Shop - for the work of isolated rural craft workers who were unable to achieve proper prices for their work.
In 1935 she launched the Irish Homespun Society in an effort to preserve some of the country's traditions. Exhibitions were held at the annual Dublin Spring Show. She was also a driving force behind Irish Country Markets Ltd (1946), a cooperative society marketing crafts and produce; of which she was chairwoman until 1975. She was a member of the RDS from 1946, and served on its industries, art, and general purposes committee in 1948. She was a founding member of the Arts Council (1951), and in 1956 was appointed to the council of the Arts and Crafts Society of Ireland and to the National Savings Committee.
Gahan was instrumental in the ICA's securing funds from the Kellogg Foundation of America for An Grianán, their residential training college at Termonfeckin, Co. Louth, which opened in 1954. In 1976 she became the first female vice-president of the RDS. The Muriel Gahan Scholarship of two thousand Euro is awarded annually at the RDS national crafts competition.
On 7 April 2011, The Muriel Gahan Museum of Irish History was opened at An Grianán. The museum is now home to many items of Irish history, craft and culture.
- Gahan, Muriel, Anne O'Dowd, in The Encyclopaedia of Ireland, pp. 424–25, Dublin, 2003.