He was born in Nagyszalonta, Bihar county, Hungary, which is now part of Romania, although it still has a Hungarian majority (according to the 2002 census). He was the youngest of ten children, but because of tuberculosis running in the family, only two of them lived beyond childhood. At the time of his birth, his older sister Sára was already married and his parents, György Arany and Sára Megyeri, were 60 and 44 years old, respectively. János Arany learned to read and write early on, and was reported to read anything he could find in Hungarian and Latin. Since his parents needed support early in Arany's life, he started working at the age of 14 as an associate teacher.

From 1833 he attended the Reformed College of Debrecen where he studied German and French, though he quickly became tired of scholarly life, and temporarily joined an acting troupe. Later on, he worked in Nagyszalonta, Debrecen, and Budapest as teacher, newspaper editor, and in various clerk positions.

In 1840 he married Julianna Ercsey (1816 – 1885). They had two children, Julianna, whose early death by pneumonia devastated the poet, and László, who also became a poet.

In 1845, he won the competition of the Kisfaludy Társaság (a literary society) with his writing, "Az elveszett alkotmány" ("The lost constitution" in English). After Toldi, one of his most famous works, was published, he and Sándor Petőfi became close friends (see the letters: To János Arany by Petőfi and Reply to Petőfi by Arany). His friend's death in the Hungarian Revolution of 1848 had a great impact on him.

He was employed as a teacher in Nagykőrös, where the local museum is named after him.

Arany was elected a member of Hungarian Academy of Sciences in 1858. He was the secretary general of the Academy from 1865. Also, he was elected director of the Kisfaludy Society, the greatest literary association of Hungary.

The early death of his daughter, Julianna in 1865 marked the beginning of Arany's hiatus as a poet. He did not write any original pieces until the summer of 1877, when he began working on his poetic cycle entitled Őszikék. Őszikék is substantially different from the previous works of Arany, concerning themes like elderliness, or the imminence of death.

Arany died in Pest-Buda on October 22, 1882. The first scientific monograph on Arany was written by Frigyes Riedl.

He translated three dramas of Shakespeare into Hungarian, A Midsummer Night's Dream, Hamlet and King John, and they are considered to be some of the greatest translations into Hungarian in history; he also helped other Hungarian translators with his comments, and translated works by Aristophanes, Mikhail Lermontov, Aleksandr Pushkin, and Molière. The epic poetry of János Arany presents the legendary and historical past of his nation. The Death of King Buda (1864), the first part of a projected Hun trilogy is one of the best narrative poems in Hungarian literature. The other parts of the trilogy (Ildikó, and Prince Csaba) are unfinished.

One of his most famous poems is "A Walesi Bárdok" (The Bards of Wales). Arany wrote this poem when Franz Joseph the Austrian Emperor visited Hungary for the first time after he defeated the Hungarian Revolution of 1848. Originally Arany was asked to write a poem to praise the Emperor. The poem is well known in Hungary and concerns the campaigns of Edward I to subjugate the Welsh and trample over their culture. Arany was drawing a parallel here with Austria's treatment of Hungary and the Hungarians. It is this poem, more than anything else, that has ensured Hungarians are familiar with Wales.

His poem "Dante" is one of those few verses in Western literature that can seize concisely the whole meaning and transcendency of human life. (Peter Ustinov - British actor)

Some remarkable pieces of Arany's works have been translated to English by Watson Kirkconnell.

He is today considered as one of the greatest Hungarian poets beside Sándor Petőfi, Endre Ady, Miklós Radnóti and Attila József.