Martin O'Donoghue was born in Dublin in May 1933. He was educated at Crumlin Road and obtained a doctorate from in economics from University College Dublin and Trinity College Dublin. From 1962-1964 and from 1967-1969 he was economic consultant at the Departments of Education and Finance respectively. From 1970-1973 O'Donoghue was economic adviser to the Taoiseach, Jack Lynch.
In 1977 O'Donoghue was elected to Dáil Éireann as a Fianna Fáil TD. He was the architect of the election manifesto which saw Fianna Fáil achieve an unprecedented twenty seat majority. O'Donoghue was immediately appointed Minister for Economic Planning and Development. In 1979 Charles Haughey became Taoiseach and O'Donoghue's ministerial position was discontinued. In 1982 O'Donoghue was returned to Cabinet as Minister for Education. He resigned in October of that year when he refused to support Haughey in a leadership challenge.
In November O'Donoghue lost his Dáil seat in the general election, however, he was elected to Seanad Éireann as a senator. He remained in Seanad Éireann until 1987 when he drifted out of Fianna Fáil to support the Progressive Democrats. In 1998 O'Donoghue became a director of the Irish Central Bank and is currently Professor of Economics at Trinity College Dublin.