Khanolkar was born on 8 March 1930 in the village of Baglanchi Rai near Vengurla in Maharashtra into a family with meagre means.
He started writing poetry in 1950 and received acclaim for his poem Shunya Shrungarte, which featured in the February edition of Marathi literary journal Satya Katha in 1954.
Khanolkar completed his education up to matriculation and began running the family business of "Khanaval" (a small hotel).
Jarach firli kinkhabichi sui Juicha usvit Shela Ani Thanakla Gatasmruticha Kalokhane Kapur Pela –
Compared with these poems, his collection published in Nakshtrache Dene in 1975 are a great deal more pleasant; he appears to have overcome his suffering.
Khanolkar's play Ek Shunya Bajirao (एक शून्य बाजीराव) is considered a modern Marathi classic, unique in form and content.
Khanolkar's play Ajab Nyay Wartulacha (अजब न्याय वर्तुळाचा) was an adaptation of Brecht's The Caucasian Chalk Circle.
Vijaya Mehta's production of Khanolkar play, Ek Shoonya Bajirao is considered a landmark in contemporary Indian theatre.