Masefield was born in Ledbury in Herefordshire, to Caroline and George Masefield, a solicitor. His mother died giving birth to his sister when Masefield was only six, and he went to live with his aunt. His father died soon after following a mental breakdown. After an unhappy education at the King's School in Warwick (now known as Warwick School), where he was a boarder between 1888 and 1891, he left to board the HMS Conway, both to train for a life at sea, and to break his addiction to reading, of which his aunt thought little. He spent several years aboard this ship and found that he could spend much of his time reading and writing. It was aboard the Conway that Masefield’s love for story telling grew. While on the ship, he listened to the stories told about sea lore. He continued to read, and felt that he was to become a writer and story teller himself.

In 1894, Masefield boarded the Gilcruix, destined for Chile - this first voyage bringing him the experience of sea sickness. He recorded his experiences while sailing through the extreme weather, his journal entries reflecting a delight in seeing flying fish, porpoises, and birds, and was awed by the beauty of nature, including a rare sighting of a nocturnal rainbow on his voyage. On reaching Chile, Masefield suffered from sunstroke and was hospitalized. He eventually returned home to England as a passenger aboard a steam ship. In 1895, Masefield returned to sea on a windjammer destined for New York City. However, the urge to become a writer and the hopelessness of life as a sailor overtook him, and in New York, he deserted ship. He lived as a vagrant for several months, before returning to New York City, he did many odd jobs, finding work as an assistant to a bar keeper.

Sometime around Christmas in 1895, Masefield read the December 1895 edition of Truth, a New York periodical, which contained the poem "The Piper of Arll" by Duncan Campbell Scott. Ten years later, Masefield wrote to Scott to tell him what reading that poem had meant to him: "I had never (till that time) cared very much for poetry, but your poem impressed me deeply, and set me on fire. Since then poetry has been the one deep influence in my life, and to my love of poetry I owe all my friends, and the position I now hold."

For the next two years, Masefield was employed in a carpet factory, where long hours were expected and conditions were far from ideal. He purchased up to 20 books a week, and devoured both modern and classical literature. His interests at this time were diverse and his reading included works by George du Maurier, Dumas, Thomas Browne, Hazlitt, Dickens, Kipling, and R. L. Stevenson. Chaucer also became very important to him during this time, as well as poetry by Keats and Shelley. He eventually returned home to England in 1897 as a passenger aboard a steam ship. When Masefield was 23, he met his future wife, Constance Crommelin, who was 35. Educated in classics and English Literature, and a mathematics teacher, Constance was a match for Masefield despite the difference in age. The couple had two children (Judith, born in 1904, and Lewis, in 1910).

By 24, Masefield’s poems were being published in periodicals and his first collected works, Salt - Water Ballads (1902) was published, the poem "Sea - Fever" appearing in this book. Masefield then wrote the novels, Captain Margaret (1908) and Multitude and Solitude (1909). In 1911, after a long drought of poem writing, he composed "The Everlasting Mercy", the first of his narrative poems, and within the next year, Masefield had produced two more, "The Widow in the Bye Street" and "Dauber". As a result, Masefield became widely known to the public and was praised by critics, and in 1912, he was awarded the annual Edmund de Polignac prize.

When World War I began, though old enough to be exempted from military service, Masefield joined the staff of a British hospital for French soldiers, Hopital Temporaire d'Arc - en - Barrois, Haute - Marne, France, serving briefly in 1915 as a hospital orderly, later publishing his own account of his experiences.

After returning home, Masefield was invited to the United States on a three month lecture tour. Although Masefield's primary purpose was to lecture on English Literature, a secondary purpose was to collect information on the mood and views of Americans regarding the war in Europe. When he returned to England, he submitted a report to the British Foreign Office, and suggested that he be allowed to write a book about the failure of the allied efforts in the Dardanelles, which possibly could be used in the US in order to counter what he thought was German propaganda there. As a result, Masefield wrote Gallipoli. This work was a success, encouraging the British people, and lifting them somewhat from the disappointment they had felt as a result of the Allied losses in the Dardanelles. Due to the success of his wartime writings, Masefield met with the head of British Military Intelligence in France and was asked to write an account of the Battle of the Somme. Although Masefield had grand ideas for his book, he was denied access to the official records, and therefore, what was to be his preface to the book was published as "The Old Front Line", a description of the geography of the Somme area.

In 1918, Masefield returned to America on his second lecture tour. Masefield spent much of his time speaking and lecturing to American soldiers waiting to be sent to Europe. These speaking engagements were very successful, and on one occasion, a battalion of all black soldiers danced and sang for him after his talk. During this tour, he matured as a public speaker and realized his ability to touch the emotions of his audience with his style of speaking, learning to speak publicly with his own heart, rather than from dry scripted speeches. Towards the end of his trip, both Yale and Harvard Universities conferred honorary Doctorates of Letters on him.

Masefield entered the 1920s as an accomplished and respected writer. His family was able to settle in a somewhat rural setting, not far from Oxford, and Masefield took up beekeeping, goat herding and poultry keeping. He continued to meet with success, the 1923 edition of "Collected Poems" selling approximately 80,000 copies. He produced three poems early in this decade. The first was Reynard The Fox, a poem that has been critically compared with works of Geoffrey Chaucer. This was followed by Right Royal and King Cole, poems where the relationship of humanity and nature emphasized. While Reynard is the best known of these, all met with acclaim.

After King Cole Masefield turned away from the long poem and back to the novel, and from 1924 till the Second World War published twelve novels, which vary from stories of the sea (The Bird of Dawning, Victorious Troy) to social novels about modern England (The Hawbucks, The Square Peg), and from tales of an imaginary land in Central America (Hard Sarker, Odtaa) to fantasies for children (The Midnight Folk, The Box of Delights). This variety in genre testifies most impressively to the breadth of his imagination, though it probably reduced his sales (which remained very respectable, however), since most readers of novels like knowing what to expect from their favourite authors. In this same period he wrote a large number of dramatic pieces. Most of these were based on Christian themes, and Masefield, to his amazement, encountered a ban on the performance of plays on biblical subjects that went back to the Reformation and had been revived a generation earlier to prevent production of Oscar Wilde's Salome. However, a compromise was reached, and in 1928 his "The Coming of Christ" was the first play to be performed in an English Cathedral since the Middle Ages.

In 1921, Masefield received an Honorary Doctorate of Literature from Oxford University, and in 1923, organized the Oxford Recitations, an annual contest whose purpose was "to discover good speakers of verse and to encourage ‘the beautiful speaking of poetry.’" The Recitations were seen as a success given the numbers of contest applicants, the promotion of natural speech in poetical recitations, and the number of people learning how to listen to poetry. Masefield began to question however, whether the Recitations should continue as a contest, believing that the event should become more of a festival. In 1929, Masefield broke with the contest concept, and the Recitations came to an end.

In 1930, on the death of Robert Bridges, a new Poet Laureate was needed. Many felt that Rudyard Kipling was a likely choice, however, upon the recommendation of Prime Minister Ramsay MacDonald, King George V appointed Masefield, who remained in office until his death in 1967. The only person to remain in the office for a longer period was Tennyson. In 1932, Masefield was commissioned to write a poem to be set to music by the Master of the King's Musick, Sir Edward Elgar and performed by choir and orchestra at the unveiling of the Queen Alexandra Memorial by the King on 8 June 1932. For this he wrote the ode "So many true Princesses who have gone". Although the requirements of Poet Laureate had changed, and those in the office were rarely required to write verse for special occasions, Masefield took his appointment seriously and produced a large quantity of verse. Poems composed in his official capacity were sent to The Times. Masefield’s humility was shown by his inclusion of a stamped envelope with each submission so that his composition could be returned if it were found unacceptable for publication. After his appointment, Masefield received the Order of Merit by King George V and many honorary degrees from British universities, in 1937 being elected as President of the Society of Authors. Masefield encouraged the continued development of English literature and poetry, and began the annual awarding of the Royal Medals for Poetry for a first or second published edition of poetry by a poet under the age of 35. Additionally, his speaking engagements were calling him further away, often on much longer tours, yet he still produced significant amounts of work in a wide variety of genres. To those he had already used he now added autobiography, producing New Chum, In the Mill, and So Long to Learn. Some critics judged Masefield to be an even finer writer of prose than of verse.

It was not until about the age of 70, that Masefield slowed his pace due to illness. In 1960, Constance died at 93, after long illness. Although her death was heartrending, he had spent a tiring year watching the woman he loved die. He continued his duties as Poet Laureate; In Glad Thanksgiving, his last book, was published when he was 88 years old. In late 1966, Masefield developed gangrene in his ankle, which spread to his leg, dying of the infection on 12 May 1967. According to his wishes, he was cremated and his ashes placed in Poets’ Corner in Westminster Abbey. Later, the following verse was discovered, written by Masefield, addressed to his "Heirs, Administrators, and Assigns":

The Masefield Centre at Warwick School, which Masefield attended, and a high school in Ledbury, Herefordshire have been named in his honour. In 1977, Folkways Records released an album of his poetry, including some read by Masefield himself.