Halsey was born in Elizabeth, New Jersey, on October 30, 1882, the son of Captain William F. Halsey, Sr., USN. His father was a descendant of Senator Rufus King, who was an American lawyer, politician, diplomat, and Federalist candidate for both Vice President (1804, 1808) and President of the United States (1816). Halsey attended the Pingry School.

After waiting two years for an appointment to the United States Naval Academy, young Halsey, Jr. decided to study medicine at the University of Virginia, then to get into the Navy as a doctor. He chose that university because his best friend, Karl Osterhause, was there. Years later, Halsey admitted that he learned little during his one and only year at Virginia, but he had a wonderful time. Despite that, Halsey was a member of the elite and secretive Seven Society. He also joined the prestigious Delta Psi fraternity (AKA St. Anthony Hall) at UVA in 1899.

Halsey graduated in 1904 from the Naval Academy with several athletic honors, and he spent his early service years in battleships and torpedo boats, beginning with USS Du Pont in 1909. The United States Navy was expanding at that time, and the Navy was short on officers; Halsey was one of the few who were promoted directly from Ensign to full Lieutenant, skipping the rank of Lieutenant (junior grade). Torpedoes and torpedo boats became specialties of his, and he commanded the First Group of the Atlantic Fleet's Torpedo Flotilla in 1912 through 1913, and also several torpedo boats and destroyers during the 1910s and 1920s. Lieutenant Commander Halsey's World War I service, including command of USS Shaw in 1918, was sufficiently distinguished to earn a Navy Cross (which was not a medal for life and death valor, as it later became).

From 1922 through 1925, Halsey served as Naval Attache in Berlin, Germany, and commanded USS Dale during a European cruise. During 1930 – 1932, Captain Halsey led two destroyer squadrons, then studied at the Naval War College in the mid 1930s. Prior to assuming command of an aircraft carrier, he undertook aviator instruction, as required by Federal law, but he took the more difficult Naval Aviator (pilot) course rather than merely the Naval Aviation Observer program. He insisted on taking the full twelve week course, and he was the last one of his class to graduate with his wings as a pilot. He then commanded the large aircraft carrier USS Saratoga, and also Naval Air Station Pensacola at Pensacola, Florida. Captain Halsey was promoted to Rear Admiral in 1938, commanding Carrier Divisions for the next three years, and, as a Vice Admiral, also serving as the USN overall Commander of the Aircraft Battle Force.

Vice Admiral Halsey was at sea in his flagship, USS Enterprise, during the Japanese attack on Pearl Harbor. Upon learning of the Japanese attack, he was rumored to have remarked, "Before we're through with 'em, the Japanese language will only be spoken in hell." Halsey's contempt for the Japanese was well displayed throughout the war to the officers and sailors under his command in very successful campaigns to boost morale. One such example was the slogan attributed to Halsey, "Kill Japs, Kill Japs, Kill More Japs!" The more of the little yellow bastards you kill, the quicker we go home!  During the first six months of the war, his carrier task force took part in raids on enemy held islands and in the Doolittle Raid on Japan. By this time he had adopted the slogan, "Hit hard, hit fast, hit often."

Just before the Battle of Midway he was beached by an irritating skin disease from which he suffered throughout most of his life. He lent his chief of staff, Captain Miles Browning, to his hand picked successor for participation in the seaborne defense of Midway Island, Rear Admiral Raymond Spruance, who, under the overall command of Rear Admiral Fletcher, and despite difficulties from Browning, led the American carrier forces to a victory against the Japanese Combined Fleet.

Halsey took command in the South Pacific Area in mid October 1942, at a critical stage of the Guadalcanal Campaign. Among his staff officers was his Assistant Intelligence Officer, noted Hollywood producer and screenwriter, Commodore (later Rear Admiral) Gene Markey, USNR. After Guadalcanal was secured in February 1943, Admiral Halsey's forces spent the rest of the year battling up the Solomon Islands Chain to Bougainville, then isolated the Japanese fortress at Rabaul by capturing positions in the Bismarck Archipelago.

Admiral Halsey left the South Pacific in May 1944, as the war surged toward the Philippines and Japan. From September 1944 to January 1945, he led the U.S. Third Fleet during campaigns to take the Palaus, Leyte and Luzon, and on many raids on Japanese bases, including on the shores of Formosa, China, and Vietnam.

In October 1944, amphibious forces of the U.S. Seventh Fleet carried out major landings on the island of Leyte in the Central Philippines. Halsey's Third Fleet was assigned to cover and support Seventh Fleet operations around Leyte. In response to the invasion, the Japanese launched a vast operation (known as 'Sho-Go') involving almost all their surviving fleet, and aimed at destroying the invasion shipping in Leyte Gulf. A force built around a relatively weak group of Japanese aircraft carriers (Admiral Ozawa's 'Northern Force') was meant to lure the covering U.S. forces away from the Gulf while two other forces (the 'Southern' and 'Center' Forces) built around a total of 7 battleships and 16 cruisers broke through to the beachhead and attacked the invasion shipping. This operation was to bring about the Battle for Leyte Gulf, the largest naval battle of the Second World War and, by some criteria, the largest naval battle in history.

The Center Force commanded by Vice Admiral Takeo Kurita was located and attacked by American picket submarines on October 23, and on October 24, in the Battle of the Sibuyan Sea, Third Fleet's aircraft attacked it, sinking the giant battleship Musashi and damaging other ships. Kurita turned westwards, towards his base, but later reversed course and headed again for San Bernardino Strait through which he intended to pass to reach Leyte Gulf. By this stage, the carriers of Ozawa's decoy Northern Force had been located by Halsey's aircraft. Halsey made the momentous decision to take all his available strength northwards on the night of 24 – October 25 to strike the Japanese carrier force on the following morning. He resolved to leave San Bernardino Strait entirely unguarded. As C. Vann Woodward wrote, "not so much as a picket destroyer was left".

Halsey had swallowed the bait. He also failed to advise Admiral Kinkaid and Seventh Fleet of his decision. However, the Seventh Fleet intercepted an organizational message from Halsey to his own task group commanders, which led Kinkaid and his staff to believe that Halsey was taking his three available carrier groups northwards, but would be leaving Task Force 34 — a powerful battleship and cruiser force — guarding San Bernardino Strait.

Despite ominous aerial reconnaissance reports on the night of 24 – October 25, Halsey continued to assume that the approaching Japanese Center Force had been neutralized, and he continued to take his entire available strength northwards, away from San Bernardino Strait and Leyte Gulf.

As a result, when Kurita's powerful Center Force emerged from San Bernardino on the morning of October 25, they found not one Allied ship to oppose them. Advancing down the coast of the island of Samar towards their objective — the invasion shipping in Leyte Gulf — they took Seventh Fleet's escort carriers and their screening ships entirely by surprise. In the desperate and unequal Battle off Samar which followed, Kurita's ships destroyed one of the small escort carriers and three ships of the carriers' screen, and damaged many USN ships, but the heroic resistance of the escort carrier groups took a heavy toll on Kurita's ships, and his nerves. He decided to withdraw towards San Bernardino Strait and the west without achieving anything further.

When the Seventh Fleet's escort carriers found themselves under attack from the Center Force, Halsey began to receive a succession of desperate calls from Kinkaid asking for immediate assistance off Samar. For over two hours Halsey turned a deaf ear to these calls. Then, shortly after 10:00 hours, an anxious message was received — "Turkey trots to water. Where is repeat where is Task Force 34? The world wonders" — from Admiral Chester Nimitz, the CINCPAC, Halsey's immediate superior, referring to the battleship – cruiser force thought to have been covering San Bernardino Strait, and thus the Seventh Fleet's northern flank. The tail end of this message was intended as padding designed to confuse enemy decoders, but was mistakenly left in the message when it was handed to Halsey. The vaguely insulting tone of the message threw Halsey into a screaming fit.

Halsey turned the battleships and their escorts southwards at 11:15, more than an hour after he received the signal from Nimitz. This cost Task Force 34 more than two hours to make it back to the position it had been when Nimitz's signal was received. As the battle force came south it slowed to 12 knots so the battleships could top up the destroyers with fuel, incurring another two and a half hour delay. By then, it was too late for Task Force 34 either to assist the Seventh Fleet's escort carrier groups or to prevent Kurita's force from making its escape.

This succession of actions on Halsey's part during 24 and October 25 was thought by some observers to have damaged his reputation. Professor Samuel Morison of Harvard University, cited as the country's most prolific naval historian, called the Third Fleet run to the north "Halsey's Blunder". Fleet Admiral William D. Leahy remarked afterwards "We didn't lose the war for that but I don't know why we didn't". The operation has derisively been called "The Battle of Bull's Run".

After the Leyte Gulf engagement, Third Fleet was confronted with another powerful enemy in mid December — Typhoon Cobra (also known as "Halsey's Typhoon"). While conducting operations off the Philippines, the force remained on station rather than avoiding a major storm, which sank three destroyers and inflicted damage on many other ships. Some 800 men were lost, in addition to 146 aircraft. A Navy court of inquiry found that while Halsey had committed an error of judgement in sailing into the typhoon, it stopped short of unambiguously recommending sanction.

In January 1945, Halsey passed command of his fleet to Admiral Spruance (whereupon its designation changed to 'Fifth Fleet'). Halsey resumed command of Third Fleet in late May 1945 and retained it until the end of the war. In early June 1945 Halsey again sailed the fleet into the path of a typhoon, and while ships sustained crippling damage, none were lost. Six lives were lost and 75 planes were lost or destroyed, with almost 70 badly damaged. Again a Navy court of inquiry was convened, and it suggested that Halsey be reassigned, but Admiral Nimitz recommended otherwise due to Halsey's prior service.

He was present when Japan formally surrendered on the deck of his flagship, USS Missouri, on September 2, 1945.

Halsey was promoted to Fleet Admiral in December 1945, and retired from active duty in March 1947. In the meantime, he served as best man at Commodore Markey's wedding to Hollywood actress Myrna Loy at San Pedro, California, in January 1946. From the late forties to the late fifities, he was involved in several failed efforts to preserve his former flagship USS Enterprise (CV-6) as a memorial in New York harbor. Halsey died on August 16, 1959 on Fishers Island, NY, and was interred in Arlington National Cemetery. His wife, Frances Grandy Halsey (1887 – 1968), is buried with him. Halsey Minor, a descendant, is named after him.

• Two ships have been named for Admiral Halsey: USS Halsey (CG-23), a Leahy - class guided missile cruiser, and USS Halsey (DDG-97), an Arleigh Burke - class guided missile destroyer.
• The airfield at Naval Air Station North Island in San Diego, California, was dedicated in honor of Halsey on October 20, 1960, during a celebration of 50 years of naval aviation (1911 – 1961).
• At least two American colleges have buildings named after Halsey: Halsey Hall at the University of Virginia and the Halsey Fieldhouse at the United States Naval Academy.
• A street, Halsey Court, is named after him in Pittsburgh, Pennsylvania.
• Elizabeth High School in Elizabeth, New Jersey, has a complex — Halsey House — named for Halsey.
• Halsey Terrace, US Navy housing in Honolulu, Hawaii.
• Halsey society at Texas A&M University Naval ROTC.
• a defunct rest area along the New Jersey Turnpike was named after him at the present New Jersey Route 81 interchange.