Seward was born in Florida, Orange County, New York, on May 16, 1801, one of five children of Samuel Sweezy Seward and his wife Mary Jennings Seward. Samuel Seward, described as "a prosperous, domineering doctor and businessman," was the founder of the S. S. Seward Institute, today a secondary school in the Florida Union Free School District. Seward served as president of the S.S.Seward Institute after the death of his father, even while serving as Secretary of State during the Lincoln and Johnson administrations.

Seward studied law at Union College, graduating in 1820 with highest honors, and as a member of Phi Beta Kappa. He was admitted to the New York State Bar in 1821. In that same year, he met Frances Adeline Miller, a classmate of his sister Cornelia at Emma Willard's Troy Female Seminary and the daughter of Judge Elijah Miller of Auburn, New York. In 1823, he moved to Auburn where he entered into law partnership with Judge Miller, and married Frances Miller on October 20, 1824. They raised five children. Some years after his wife's death in 1865, Seward formally adopted his companion Olive Risley Seward (1841-1908) as his "daughter."

Seward entered politics with the help of his friend Thurlow Weed, whom he had met by chance after a stagecoach accident. In 1830, Seward was elected to the state senate as an Anti-Masonic candidate, and served for four years. In 1834, the 33-year-old Seward was named the Whig party candidate for Governor of New York, but lost to incumbent Democrat William Marcy who won 52% of the vote to Seward's 48%. From 1836 to 1838, Seward served as agent for the Holland Land Company in Westfield, New York, where he was successful in easing tensions between the company and local landowners. On July 16, 1837, he delivered to the students and faculty of the newly-formed Westfield Academy a Discourse on Education, in which he advocated for universal education. In 1838, Seward again challenged Marcy, and was elected Governor of New York by a majority of 51.4% to Marcy's 48.6%. He was narrowly re-elected to a second two-year term in 1840. As a state senator and governor, Seward promoted progressive political policies including prison reform and increased spending on education. He supported state funding for schools for immigrants operated by their own clergy and taught in their native language. This support, which included Catholic parochial schools, came back to haunt him in the 1850s, when anti-Catholic feelings were high, especially among ex-Whigs in the Republican Party. Beginning in the late 1830s, Seward became a radical opponent of slavery. His views – and the even stronger anti-slavery feelings of his wife – were formed in part by their observations of the conditions of slavery while traveling in the South with their children in 1835. He opposed the expansion of slavery and resisted attempts by Southern states to extradite those who enabled fugitive slaves to escape.

In 1846 Seward became the center of controversy in his hometown when he defended, in separate cases, two convicts accused of murder. Henry Wyatt, a white man, was charged in the stabbing death of a fellow prison inmate; William Freeman, of African American and Native American ancestry, was accused of breaking into a home and stabbing four people to death. In both cases the defendants were mentally ill and had been severely abused while in prison. Seward, having long been an advocate of prison reform and better treatment for the insane, sought to prevent both men from being executed by using a relatively new defense of insanity. In a case involving mental illness with heavy racial overtones Seward argued, "The color of the prisoner’s skin, and the form of his features, are not impressed upon the spiritual immortal mind which works beneath. In spite of human pride, he is still your brother, and mine, in form and color accepted and approved by his Father, and yours, and mine, and bears equally with us the proudest inheritance of our race—the image of our Maker. Hold him then to be a Man." Later, Seward quoted Freeman’s brother-in-law, praising his eloquence: “They have made William Freeman what he is, a brute beast; they don’t make anything else of any of our people but brute beasts; but when we violate their laws, then they want to punish us as if we were men.” In the end both men were convicted. Although Wyatt was executed, Freeman, whose conviction was reversed on Seward's successful appeal to the New York Supreme Court, died in his cell of tuberculosis.

Seward supported the Whig candidate, General Zachary Taylor, in the presidential election of 1848. He said of Taylor, "He is the most gentle-looking and amiable of men." Taylor was a slave holding plantation owner, but was friendly to Seward anyway.

William Seward was elected a U.S. Senator from New York as a Whig in 1849, and emerged as the leader of the anti-slavery "Conscience Whigs". Seward opposed the Compromise of 1850, and was thought to have encouraged Taylor in his supposed opposition. More recent scholarship suggests that Taylor was not under Seward's influence and would have accepted the Compromise if he had not died. Seward believed that slavery was morally wrong, and said so many times, outraging Southerners. He acknowledged that slavery was legal under the Constitution, but denied that the Constitution recognized or protected slavery. He famously remarked in 1850 that "there is a higher law than the Constitution". He continued to argue this point of view over the next ten years. He presented himself as the leading enemy of the Slave Power – that is, the perceived conspiracy of southern slave owners to seize the government and defeat the progress of liberty. Seward was an opponent of the Fugitive Slave Act, and he defended runaway slaves in court. He supported personal liberty laws.

In February 1855, he was re-elected as a Whig to the U.S. Senate, and joined the Republican Party when the New York Whigs merged with the Anti-Nebraskans later the same year. Seward did not seriously compete for the presidential nomination (won by John C. Frémont) in 1856, but sought and was expected to receive the nomination in 1860. In October 1858, he delivered a famous speech in which he argued that the political and economic systems of North and South were incompatible, and that, due to this "irrepressible conflict," the inevitable "collision" of the two systems would eventually result in the nation becoming "either entirely a slaveholding nation, or entirely a free-labor nation.". Yet, Seward was not an abolitionist. Like Lincoln, he believed slavery could and should be extinguished by long-run historical forces rather than by coercion or war.

In 1859, confident of gaining the presidential nomination and advised by his political ally and friend Thurlow Weed that he would be better off avoiding political gatherings where his words might be misinterpreted by one faction or another, Seward left the country for an eight-month tour of Europe. During that hiatus, his lesser-known rival Abraham Lincoln worked diligently to line up support in case Seward failed to win on the first ballot. After returning to the United States, Seward gave a conciliatory, pro-Union Senate speech that reassured moderates but alienated some radical Republicans. (Observing events from Europe, Karl Marx, who was ideologically sympathetic to Frémont, contemptuously regarded Seward as a "Republican Richelieu" and the "Demosthenes of the Republican Party" who had sabotaged Frémont's presidential ambitions.) Around the same time, his friend Horace Greeley turned against him, opposing Seward on the grounds that his radical reputation made him unelectable. When Lincoln won the nomination, Seward loyally supported him and made a long speaking tour of the West in the autumn of 1860.

Abraham Lincoln appointed him Secretary of State in 1861 and he served until 1869. As Secretary of State, he argued that the United States must move westward. Proposing American possession of the Danish West Indies, Samaná, Panama, and Hawaii, only the Brook Islands were annexed. Despite a minimal degree of Congressional support however, by the end of his term, Seward had established a realm of informal influence which, nonetheless included the Hawaiian Islands, Japan, and even, China. Seward also played an integral role in resolving the Trent Affair, and in negotiating the Lyons-Seward Treaty of 1862, which set forth aggressive measures by which the United States and Great Britain agreed to end the Atlantic slave trade.

On April 14, 1865, Lewis Powell, an associate of John Wilkes Booth, attempted to assassinate Seward, the same night that Abraham Lincoln was shot. Powell gained access to Seward's home by telling a servant, William Bell, that he was delivering medicine for Seward, who was recovering from a recent near-fatal carriage accident on April 5, 1865. Powell started up the stairs when then confronted by one of Seward's sons, Frederick. He told the intruder that his father was asleep and Powell began to start down the stairs, but suddenly swung around and pointed a gun at Frederick's head. After the gun misfired, Powell panicked, then repeatedly struck Frederick over the head with the pistol, leaving Frederick in critical condition on the floor. Powell then burst into William Seward's bedroom with a bowie knife and stabbed him several times in the face and neck. Powell also attacked and injured another son (Augustus), a soldier (SGT George Robinson) who had been assigned to stay with Seward, and a messenger (Emerick Hansell) who arrived just as Powell was escaping. During the attack Seward was wearing a jaw splint (often incorrectly reported as a "neck brace") as a result of the carriage accident, and it is said that this saved his life. However, he carried the facial scars from the attack for the remainder of his life. The events of that night took their toll on his wife, Frances, who died June 1865. His daughter Fanny died of tuberculosis in October 1866. Powell was captured the next day and was executed on July 7, 1865, along with David Herold, George Atzerodt, and Mary Surratt, three other conspirators in the Lincoln assassination.

Although it took Seward several months to recover from his wounds, he emerged as a major force in the administration of the new president, Andrew Johnson, frequently defending his more moderate reconciliation policies towards the South, to the point of enraging Radical Republicans who once regarded Seward as their friend but now attacked him.

In the fall of 1866, Seward joined Johnson, as well as Ulysses S. Grant and the young General George Armstrong Custer, along with several other administration figures, on the president's ill-fated "Swing Around the Circle" campaign trip. At one point Seward became so ill on the trip, probably from cholera, that he was sent back to Washington in a special car. Both Johnson and Grant, as well as several members of the Seward family, thought the Secretary was near death. But as with his April 1865 stabbing, Seward surprised many by his rapid recovery.

Seward's most famous achievement as Secretary of State was his successful acquisition of Alaska from Russia. On March 30, 1867, he completed negotiations for the territory, which involved the purchase of 586,412 square miles (1,518,800 km²) of territory (more than twice the size of Texas) for $7,200,000, or approximately 2 cents per acre (equivalent to US$95 million in 2005). The purchase of this frontier land was alternately mocked by the public as "Seward's Folly," "Seward's Icebox," and Andrew Johnson's "polar bear garden." Alaska celebrates the purchase on Seward's Day, the last Monday of March.

Seward retired as Secretary of State after Ulysses S. Grant took office as president. During his last years, Seward traveled and wrote prolifically. Most notably, he traveled around the world in fourteen months and two days from July, 1869, to September, 1871. On October 10, 1872, Seward died in his office in his home in Auburn, New York, after having difficulty breathing. His last words were to his children saying, "Love one another." He was buried in Fort Hill Cemetery in Auburn, New York, with his wife and two children, Cornelia and Fanny. His headstone reads, “He was faithful.” His son, Frederick, edited and published his memoirs in three volumes.