Vamvakaris was born on May 10, 1905 in Ano Chora, Syros, Greece. His family belonged to the sizeable Roman Catholic community of the island, the Frankosyrians, a name deriving from the common Greek reference to West Europeans collectively as "Franks".

At the age of twelve, believing he was wanted by the police, Vamvakaris left Syros and went to Piraeus. He worked as a stevedore, employee at a pit coal mine, polisher, paperman, butcher and other jobs. He heard a bouzouki player playing, and swore that if he did not learn to play the instrument in six months he would cut off his hand with a cleaver (he was working in the Athens slaughterhouse at the time). He learned bouzouki, becoming an innovative virtuoso player, and began to compose music, and write songs. At first he often played in hashish smoking establishments known as Tekes, later he and his band, which included Giorgos Batis, Anestis Delias and Stratos Pagioumtzis played in more legitimate clubs. They were extremely popular, and Markos made many recordings.

Vamvakaris recorded his first rebetiko disc, Na 'Rchosouna Re Magka Mou (Να 'ρχόσουνα ρε μάγκα μου) in 1932. Among other songs in that period, he wrote the classic love song "Frangkosyriani" .

After the liberation of Greece from the occupation of Nazi Germany, difficult times arrived, since his kind of music was no longer fashionable. He also suffered badly with arthritis in his hands. The slump in his fortunes lasted until the early 1960s, when after initiatives by Vassilis Tsitsanis, many of his old songs were revived, sung by modern singers including Grigoris Bithikotsis, and Stratos Dionysiou. Vamvakaris died on February 8, 1972 at the age of 66.

Markos may be heard on many of the anthology CDs listed in the rebetiko discography. CDs of his own which may be available in English language countries include:

• Markos Vamvakaris Bouzouki Pioneer: 1932 - 1940 Rounder Select, 1998.

Stavros Xarchakos and Nikos Gatsos wrote a song called Gramma sto Marko Vamvakari (Letter to Markos Vamvakaris, Greek: Γράμμα στο Μάρκο Βαμβακάρη), sung by George Dalaras and actress Despo Diamantidou. Also, Thodoros Derveniotis and Kostas Virvos wrote Markos, sung by Kaiti Abavi. Markos Vamvakaris is also mentioned in the following songs:

• Deka palikaria (Ten lads, Greek: Δέκα παλικάρια) by Manos Loïzos and Lefteris Papadopoulos, sung by George Dalaras
• Ihes thalasses sta matia (You had seas in your eyes, Greek: Είχες θάλασσες στα μάτια) by Elias Andriopoulos and Michalis Bourboulis, sung by Antonis Kalogiannis
• I mikri istoria tis Marinas (The short story of Marina, Greek: Η μικρή ιστορία της Μαρίνας) by Dionysis Tsaknis
• Rock fegari (Rock moon, Greek: Ροκ φεγγάρι) by Andreas Mexas and Vasilis Mastrokostas, sung by Paschalis Terzis
• San ton Samouil sto Kougi (Like Samuel in Koughi, Greek: Σαν τον Σαμουήλ στο Κούγκι) by Tzimis Panousis
• Sto retire (In the penthouse, Greek: Στο ρετιρέ) by Angelos Axiotis, sung by Antonis Kalogiannis
• Ta mesimeria tis Kyriakis (Sunday afternoons, Greek: Τα μεσημέρια της Κυριακής) by Giorgos Hatzinasios and Yiannis Logothetis, sung by Manolis Mitsias
• Graphic novel Rébétiko by David Prudhomme (Futuropolis, 2009)