Galsworthy was born at Kingston Hill in Surrey, England into an established wealthy family, the son of John and Blanche (nee Bailey) Galsworthy. He attended Harrow and New College, Oxford, training as a barrister and was called to the bar in 1890. However, he was not keen to begin practicing law and instead travelled abroad to look after the family's shipping business interests. During these travels he met Joseph Conrad, then the first mate of a sailing-ship moored in the harbour of Adelaide, Australia, and the two future novelists became close friends. In 1895 Galsworthy began an affair with Ada Nemesis Pearson, the wife of one of his cousins. After her divorce the pair eventually married on 23 September 1905 and stayed together until John death in 1933.

From the Four Winds was Galsworthy's first published work in 1897, a collection of short stories. These, and several subsequent works, were published under the pen name John Sinjohn and it would not be until The Island Pharisees (1904) that he would begin publishing under his own name, probably owing to the death of his father. His first play, The Silver Box (1906) became a success, and he followed it up with The Man of Property (1906), the first in the Forsyte trilogy. Although he continued writing both plays and novels it was as a playwright he was mainly appreciated at the time. Along with other writers of the time such as Shaw his plays addressed the class system and social issues, two of the best known being Strife (1909) and The Skin Game (1920).

He is now far better known for his novels and particularly The Forsyte Saga, the first of three trilogies of novels about the eponymous family and connected lives. These books, as with many of his other works, dealt with class, and in particular upper-middle class lives. Although sympathetic to his characters he highlights their insular, snobbish and acquisitive attitudes and their suffocating moral codes. He is viewed as one of the first writers of the Edwardian era; challenging in his works some of the ideals of society depicted in the proceeding literature of Victorian England. The depiction of a woman in an unhappy marriage furnishes another recurring theme in his work. The character of Irene in The Forsyte Saga is drawn from Ada Pearson even though her previous marriage was not as miserable as Irene's.

His work is often less convincing when it deals with the changing face of wider British society and how it affects people of the lower social classes. Through his writings he campaigned for a variety of causes including prison reform, women's rights, animal welfare and censorship, but these have limited appeal outside the era in which they were written. During the first world war he worked in a hospital in France as an orderly after being passed over for military service. He was elected as the first president of the International PEN literary club in 1921, was appointed to the Order of Merit in 1929–after earlier turning down a knighthood–and was awarded the Nobel Prize in 1932.

John Galsworthy died from a brain tumour at Grove Lodge, Hampstead. He was cremated and his ashes were scattered over the South Downs from an airplane. The popularity of his fiction waned quickly after his death but the hugely successful adaptation of The Forsyte Saga in 1967 renewed interest in the writer.