Sources differ on the precise year of Crazy Horse's birth, but they agree he was born between 1840 and 1845. According to a close friend, he and Crazy Horse "were both born in the same year at the same season of the year", which census records and other interviews place at about 1845. Encouraging Bear, an Oglala medicine man and spiritual adviser to the Oglala war leader, reported that Crazy Horse was born "in the year in which the band to which he belonged, the Oglala, stole One Hundred Horses, and in the fall of the year", a reference to the annual Lakota calendar or winter count. Among the Oglala winter counts, the stealing of 100 horses is noted by Cloud Shield, and possibly by American Horse and Red Horse owner, equivalent to the year 1840 - 41. Oral history accounts from relatives on the Cheyenne River Reservation place his birth in the spring of 1840. Probably the most credible source, however, is Crazy Horse's own father. On the evening of his son's death, the elderly man told Lieutenant H.R. Lemly that his son "would soon have been thirty - seven, having been born on the South Cheyenne river in the fall of 1840."

Crazy Horse was named at birth Cha-O-Ha (In the Wilderness or Among the Trees, meaning he was one with nature.) His mother's nickname for him was "Curly" or "Light Hair"; his light curly hair resembled that of his mother. Crazy Horse was born to Oglala Lakota parents. His father, born in 1810, was also named Crazy Horse. One account said that after the son had reached maturity and shown his strength, his father gave him his name and took a new one, Waglula (Worm). (Another version of how the son Crazy Horse acquired his name was that he took it after having a vision.) His mother was Rattling Blanket Woman (born 1814). Rattling Blanket Woman was the daughter of Black Buffalo and White Cow (also known as Iron Cane). Black Buffalo is famous for stopping Lewis and Clark on the Bad River. Rattling Blanket Woman was the younger sister of Lone Horn (born between 1790 and 1795, and died in 1875) and also of Good Looking Woman (born 1810). Her younger sister was named Looks At It (born 1815), later given the name They Are Afraid of Her. Crazy Horse's cousin (son of Lone Horn) was Touch the Clouds. He saved his life at least once and was with Crazy Horse when he died. It has been claimed Crazy Horse's mother was Minneconju and the sister of Spotted Tail, who was a Brulehead chief.

In the summer of 1844, Waglula (Worm) went on a buffalo hunt. He came across a Minneconjou Lakota village under attack by Crow warriors. He led his small party of warriors to the village and rescued it. Corn, the head man of the village, had lost his wife in the raid. In gratitude he gave Waglula his two eldest daughters as wives: Iron Between Horns (age 18) and Kills Enemy (age 17). Corn's youngest daughter, Red Leggins, who was 15 at the time, requested to go with her sisters; all became Waglula's wives. (Painter George Catlin made a portrait of Corn while visiting the tribe in 1832.) Crazy Horse lived in the Lakota camp with his younger brother, High Horse (son of Iron Between Horns and Waglula) and a cousin Little Hawk. (Little Hawk was the nephew of his maternal step-grandfather, Corn). The camp was attacked by Lt. Grattan and 28 other US troopers during the Grattan massacre.

After witnessing the death of Lakota leader Conquering Bear, Crazy Horse began to get trance visions. His father Waglula took him to what today is Sylvan Lake, South Dakota, where they both sat to do a hemblecha (vision quest). A red-tailed hawk led them to their respective spots in the hills; as the trees are tall in the Black Hills, they could not always see where they were going. Crazy Horse sat between two humps at the top of a hill north and to the east of the lake. Waglula sat south of Harney Peak but north of his son. Crazy Horse's vision first took him to the South, where in Lakota spirituality one goes upon death. He was brought back and was taken to the West in the direction of the wakiyans (thunder beings). He was given a medicine bundle to protect him for life. One of his animal protectors would be the white owl which, according to Lakota spirituality, would give extended life. He was also shown his "face paint" for battle, to consist of a yellow lightning bolt down the left side of his face, and white powder. He would wet this and put marks over his vulnerable areas; when dried, the marks looked like hailstones. His face paint was similar to that of his father, who used a red lightning strike down the right side of his face and three red hailstones on his forehead. Crazy Horse put no makeup on his forehead and did not wear a war bonnet. He was given a sacred song that is still sung by the Oglala people today. Lastly, he was told he would be a protector of his people. A contemporary tribesman and cousin of Crazy Horse, in his classic text, Black Elk Speaks: being the life story of a holy man of the Oglala Sioux was said to provide an account of Crazy Horse's vision from which he derived his name.

"When I was a man, my father told me something about that vision. Of course he did not know all of it; but he said that Crazy Horse dreamed and went into the world where there is nothing but the spirits of all things. That is the real world that is behind this one, and everything we see here is something like a shadow from that world. He was on his horse in that world, and the horse and himself on it and the trees and the grass and the stones and everything were made of spirit, and nothing was hard, and everything seemed to float. His horse was standing still there, and yet it danced around like a horse made only of shadow, and that is how he got his name, which does not mean that his horse was crazy or wild, but that in his vision it danced around in that queer way.

It was this vision that gave him his great power, for when he went into a fight, he had only to think of that world to be in it again, so that he could go through anything and not be hurt. Until he was killed at the Soldiers' Town on White River, he was wounded only twice, once by accident and both times by some one of his own people when he was not expecting trouble and was not thinking; never by an enemy."

This story appears to be an addition by John G. Neihardt, as his original interview transcripts with Black Elk make no mention of the origination of Crazy Horse's name.

Crazy Horse received a black stone from a medicine man named Horn Chips to protect his horse, a black-and-white "paint" which he named Inyan (rock or stone). He placed the stone behind the horse's ear, so that the medicine from his vision quest and Horn Chips would combine; he and his horse would be one in battle.

Through the late 1850s and early 1860s, Crazy Horse's reputation as a warrior grew, as did his fame among the Lakota. The Lakota conveyed accounts of him in their oral histories; they had no written language. His first kill was a Shoshone raider who had killed a Lakota woman washing buffalo meat along the Powder River. Crazy Horse fought in numerous battles between the Lakota and their traditional enemies, the Crow, Shoshone, Pawnee, Blackfeet, and Arikara, among Plains tribes.

In 1864, after the Third Colorado Cavalry decimated Northern Cheyenne in the Sand Creek Massacre, Lakota Oglala and Minneconjou bands allied with them against the US military. Crazy Horse was present at the Battle of Red Buttes and the subsequent Platte River Bridge Station Battle in July 1865. Because of his fighting ability, in 1865 Crazy Horse was named a Ogle Tanka Un (Shirt Wearer, or war leader) by the tribe. On December 21, 1866, Crazy Horse and six other warriors, both Lakota and Cheyenne, decoyed Capt. William Fetterman's 53 infantrymen and 27 cavalry troopers under Lt. Grummond into an ambush. They had been sent out from Fort Phil Kearny to follow up on an earlier attack on a wood train. Crazy Horse lured Fetterman's infantry up what Wyoming locals now call Massacre Hill. Grummond's cavalry followed the other six decoys along Peno Head Ridge and down toward Peno Creek, where several Cheyenne women taunted the soldiers. Meanwhile, Cheyenne leader Little Wolf and his warriors, who had been hiding on the opposite side of Peno Head Ridge, blocked the return route to the fort. The Lakota warriors swept over Massacre Hill to attack the infantry. Additional Cheyenne and Lakota hiding in the buckbrush along Peno Creek effectively surrounded the soldiers. Seeing that they were surrounded, Grummond headed his cavalry back to Fetterman. The combined warrior forces of nearly 1,000 killed all the US soldiers, in what became known as the Fetterman Massacre. It was the Army's worst defeat on the Great Plains up to that time.

On August 2, 1867, Crazy Horse participated in the Wagon Box Fight, also near Fort Phil Kearny. Lakota forces numbering between 1000 and 2000 attacked a wood cutting crew near the fort. Most of the soldiers fled to a circle of wagon boxes without wheels, using them for cover as they fired at the Lakota. The Lakota took substantial losses, as the soldiers were firing new breech loading rifles. These could fire ten times a minute compared to the old muzzle loading rate of three times a minute. The Lakota charged after the soldiers fired, expecting the delay of their older muskets before being able to fire again. The soldiers suffered only five killed and two wounded, while the Lakota suffered between 50 and 120 casualties. Many Lakota were buried in the hills surrounding Fort Phil Kearny in Wyoming.

In the fall of 1867, Crazy Horse invited Black Buffalo Woman to accompany him on a buffalo hunt in the Slim Buttes area of present day northwestern South Dakota. She was the wife of No Water, who had a reputation as drinking too much. It was Lakota custom to allow a woman to divorce her husband at any time. She did so by moving in with relatives or with another man, or by placing the husband's belongings outside their lodge. Although some compensation might be required to smooth over hurt feelings, the rejected husband was expected to accept his wife's decision. No Water was away from camp when Crazy Horse and Black Buffalo Woman left for the buffalo hunt. No Water tracked down Crazy Horse and Black Buffalo Woman in the Slim Buttes area. When he found them in a tipi, he called Crazy Horse's name from outside. When Crazy Horse answered, No Water stuck a pistol into the tipi and aimed for Crazy Horse. Touch the Clouds, Crazy Horse's first cousin and son of Lone Horn, was sitting in the tipi nearest the entry. He knocked the pistol upward as No Water fired, deflecting the bullet to Crazy Horse's upper jaw. No Water left, with Crazy Horse's relatives in hot pursuit. No Water ran his horse until it died and continued on foot until he reached the safety of his own village.

Several elders convinced Crazy Horse and No Water that no more blood should be shed. As compensation for the shooting, No Water gave Crazy Horse three horses. Because Crazy Horse was with a married man's wife, he was stripped of his title as Shirt Wearer (leader). At about the same time, the warrior Little Hawk was killed by a group of miners in the Black Hills while escorting some women to the new agency created by the Treaty of 1868.

In addition to his first wife Black Buffalo Woman, Crazy Horse married Black Shawl Woman, a member of the Oglala Lakota and relative of Spotted Tail. The elders sent her to heal Crazy Horse after his altercation with No Water. Crazy Horse and Black Shawl Woman were married in 1871. Black Shawl gave birth to Crazy Horse's only child, a daughter named They Are Afraid Of Her, who died in 1873. Black Shawl outlived Crazy Horse. She died in 1927 during the influenza outbreaks of the 1920s.

While married to Black Shawl Woman, Crazy Horse took Helena "Nellie" Laravie as his third wife. Nellie, also referred to as Chi-Chi and Brown Eyes Woman, was the daughter of a French trader and a woman of the Cheyenne tribe. William Garnett's first hand account of Crazy Horse's surrender alludes to Nellie as the "half blood woman" who caused Crazy Horse to fall into a "domestic trap which insensibly led him by gradual steps to his destruction."

On June 17, 1876, Crazy Horse led a combined group of approximately 1,500 Lakota and Cheyenne in a surprise attack against brevetted Brigadier General George Crook's force of 1,000 cavalry and infantry, and allied 300 Crow and Shoshone warriors in the Battle of the Rosebud. The battle, although not substantial in terms of human losses, delayed Crook's joining with the 7th Cavalry under George A. Custer. It contributed to Custer’s subsequent defeat at the Battle of the Little Bighorn. A week later at 3:00 p.m. on June 25, 1876, Custer's 7th Cavalry attacked a large encampment of Cheyenne and Lakota bands along the Little Bighorn River, marking the beginning of his last battle. Crazy Horse's actions during the battle are unknown. Possibly Crazy Horse entered the battle by repelling the first attack led by Major Marcus Reno, but it is also possible that he was still in his lodge waiting for the larger battle with Custer. Hunkpapa Warriors led by Chief Gall led the main body of the attack. Crazy Horse's tactical and leadership role in the battle remains ambiguous. While some historians think that Crazy Horse led a flanking assault, ensuring the death of Custer and his men, the only proven fact is that Crazy Horse was a major participant in the battle. His personal courage was attested to by several eye witness Indian accounts. Waterman, one of only five Arapaho warriors who fought, said that Crazy Horse "was the bravest man I ever saw. He rode closest to the soldiers, yelling to his warriors. All the soldiers were shooting at him, but he was never hit." Sioux battle participant, Little Soldier, said, "The greatest fighter in the whole battle was Crazy Horse."

On September 10, 1876, Captain Anson Mills and two battalions of the Third Cavalry captured a Miniconjou village of 36 lodges in the Battle of Slim Buttes, South Dakota. Crazy Horse and his followers attempted to rescue the camp and its headman, (Old Man) American Horse. They were unsuccessful. The soldiers killed American Horse and much of his family after they holed up in a cave for several hours. On January 8, 1877, Crazy Horse's warriors fought their last major battle at Wolf Mountain, against the US Cavalry in the Montana Territory. His people struggled through the winter, weakened by hunger and the long cold. Crazy Horse decided to surrender with his band to protect them, and went to Camp Robinson in Nebraska. Crazy Horse and other northern Oglala leaders arrived at the Red Cloud Agency, located near Camp Robinson, Nebraska, on May 5, 1877. Together with He Dog, Little Big Man, Iron Crow and others, they met in a solemn ceremony with First Lieutenant William P. Clark as the first step in their formal surrender.

For the next four months, Crazy Horse resided in his village near the Red Cloud Agency. The attention that Crazy Horse received from the Army drew the jealousy of Red Cloud and Spotted Tail, two Lakota who had long before come to the agencies and adopted the white ways. Rumors of Crazy Horse's desire to slip away and return to the old ways of life started to spread at the Red Cloud and Spotted Tail agencies. In August 1877, officers at Camp Robinson received word that the Nez Perce of Chief Joseph had broken out of their reservations in Idaho and were fleeing north through Montana toward Canada. When asked by Lieutenant Clark to join the Army against the Nez Perce, Crazy Horse and the Miniconjou leader Touch the Clouds objected, saying that they had promised to remain at peace when they surrendered. According to one version of events, Crazy Horse finally agreed, saying that he would fight "till all the Nez Perce were killed". But his words were apparently misinterpreted by half-Tahitian scout, Frank Grouard (not to be confused with Fred Gerard, another U.S. Cavalry scout during the summer of 1876), who reported that Crazy Horse had said that he would "go north and fight until not a white man is left". When he was challenged over his interpretation, Grouard left the council. Another interpreter, William Garnett, was brought in but quickly noted the growing tension.

With the growing trouble at the Red Cloud Agency, General George Crook was ordered to stop at Camp Robinson. A council of the Oglala leadership was called, then canceled, when Crook was incorrectly informed that Crazy Horse had said the previous evening that he intended to kill the general during the proceedings. Crook ordered Crazy Horse's arrest and then departed, leaving the military action to the post commander at Camp Robinson, Lieutenant Colonel Luther P. Bradley. Additional troops were brought in from Fort Laramie and on the morning of September 4, 1877, two columns moved against Crazy Horse's village, only to find that it had scattered during the night. Crazy Horse fled to the nearby Spotted Tail Agency with his sick wife (who had become ill with tuberculosis). After meeting with military officials at the adjacent military post of Camp Sheridan, Crazy Horse agreed to return to Camp Robinson with Lieutenant Jesse M. Lee, the Indian agent at Spotted Tail.

On the morning of September 5, 1877, Crazy Horse and Lieutenant Lee, accompanied by Touch the Clouds as well as a number of Indian scouts, departed for Camp Robinson. Arriving that evening outside the adjutant's office, Lieutenant Lee was informed that he was to turn Crazy Horse over to the Officer of the Day. Lee protested and hurried to Bradley's quarters to debate the issue, but without success. Bradley had received orders that Crazy Horse was to be arrested and forwarded under the cover of darkness to Division Headquarters. Lee turned the Oglala war chief over to Captain James Kennington, in charge of the post guard, who accompanied Crazy Horse to the post guardhouse. Once inside, no doubt realizing the fate that was about to befall him, Crazy Horse struggled with the guard and Little Big Man and attempted to escape. Just outside the door of the guardhouse, Crazy Horse was stabbed with a bayonet of one of the members of the guard. He was taken to the adjutant's office where he was tended by the assistant post surgeon at the post, Dr. Valentine McGillycuddy, and died late that night.

The following morning, Crazy Horse's body was turned over to his elderly parents who took it to Camp Sheridan, placing it on a scaffold there. The following month when the Spotted Tail Agency was moved to the Missouri River, Crazy Horse's parents moved the body to an undisclosed location. There are at least four possible locations as noted on a state highway memorial near Wounded Knee, South Dakota. His final resting place remains unknown. Dr. McGillycuddy, who treated Crazy Horse after he was stabbed, wrote that Crazy Horse "died about midnight." According to military records he died before midnight, making it September 5, 1877.

John Gregory Bourke's memoirs of his service in the Indian wars, On the Border with Crook, details an entirely different account of Crazy Horse's death. Bourke's account was from an interview with Crazy Horse's relative and rival, Little Big Man, who was present at Crazy Horse's arrest and wounding. The interview took place over a year after Crazy Horse's death. Little Big Man's account is that, as Crazy Horse was being escorted to the guardhouse he suddenly pulled from under his blanket two knives, one in each hand. One knife was reportedly fashioned from the end of an army bayonet. Little Big Man, standing immediately behind Crazy Horse and not wanting the soldiers to have any excuse to kill him, seized Crazy Horse by both elbows, pulling his arms up and behind him. As Crazy Horse struggled to get free, Little Big Man abruptly lost his grip on one elbow, and Crazy Horse's released arm drove his own knife deep into his own lower back. Blood splattered all over them as the attempt to escape was still possible. The guard stabbed him with his bayonet in his back, already punctured. He fell and surrendered to the guards and his commentators. When Bourke asked about the popular account of the Guard bayoneting Crazy Horse, Little Big Man explained that the guard had thrust with his bayonet, but that Crazy Horse's struggles resulted in the guard's thrust missing entirely and his bayonet being lodged into the frame of the guardhouse door. Little Big Man related that, in the hours immediately following Crazy Horse's wounding, the camp Commander had suggested the story of the guard being responsible as a means of hiding Little Big Man's involvement in Crazy Horse's death, and thereby avoiding any inter-clan reprisals. Little Big Man's account, as related by Bourke, is questionable, as it is the only one of as many as 17 eyewitness sources (aside from one other account that states the eyewitness was "not sure" of the identity of the perpetrator) from Lakota, US Army, and "mixed-blood" individuals which fails to attribute Crazy Horse's death to a soldier at the guardhouse.

The "last words" often attributed to Crazy Horse contains a terse implication of the guard. This widely published account directly contradicts the prior, witnessed statement made to the Post Commander:

The identity of the soldier accused of being responsible for the bayoneting of Crazy Horse is also debatable. Only one eyewitness account actually identifies the soldier as Private William Gentles. Historian Walter M. Camp circulated copies of this account to individuals who had been present who questioned the identity of the soldier and provided two additional names. To this day, the identification remains questionable.

There is also a theory that Crazy Horse's guard Little Big Man was bought off by the white men and he was the one who stabbed Crazy Horse in the back.

Most sources question whether Crazy Horse was ever photographed. Dr. McGillycuddy doubted any photograph of the war leader had been taken. In 1908, Walter Camp wrote to the agent for the Pine Ridge Reservation inquiring about a portrait. "I have never seen a photo of Crazy Horse," Agent Brennan replied, "nor am I able to find any one among our Sioux here who remembers having seen a picture of him. Crazy Horse had left the hostiles but a short time before he was killed and its more than likely he never had a picture taken of himself." In 1956, a small tintype portrait purportedly of Crazy Horse was published by J.W. Vaughn in his book With Crook at the Rosebud. The photograph had belonged to the family of the scout, Baptiste "Little Bat" Garnier. Two decades later, the portrait was again published with further details about how the photograph was produced at Camp Robinson, though the editor of the book "remained unconvinced of the authenticity of the photograph." Recently, the original tintype was on exhibit at the Custer Battlefield Museum in Garryowen, Montana, who have promoted the image as the only authentic portrait of Crazy Horse. Historians however continue to refute the identification. Experts argue that the tintype was taken a decade or two after 1877. The evidence includes the individual's attire (such as the length of the hair pipe breastplate and the ascot tie). In addition, no other photograph with the same painted backdrop has been found. Several photographers passed through Camp Robinson and the Red Cloud Agency in 1877 — including James H. Hamilton, Charles Howard, David Rodocker and possibly Daniel S. Mitchell — but none of them used the backdrop that appears in the tintype. After the death of Crazy Horse, Private Charles Howard produced at least two images of the famed war leader's alleged scaffold grave, located near Camp Sheridan, Nebraska.

Crazy Horse is commemorated by the incomplete Crazy Horse Memorial in the Black Hills of South Dakota — a monument carved into a mountain, in the tradition of the Mount Rushmore National Memorial (on which Korczak Ziółkowski had worked with Gutzon Borglum). The sculpture was begun by Ziółkowski in 1948. When completed, it will be 641 ft (195 m) wide and 563 ft (172 m) high. It is still incomplete because of funding constraints. Although the sculpture was originally requested by Henry Standing Bear and other Sioux elders, it has been criticized by some American Indian activists (most notably Russell Means) as exploitative of Sioux culture and Crazy Horse's memory as well as desecrating sacred ground. Crazy Horse's memorial statue depicts him pointing out toward his land in the Black Hills. His famous quote is "my lands are where my dead lie buried."