He was born in Florence, Italy. In 1858 he inherited the Marquessate of Queensberry from his father Archibald. There is some controversy about the numbering of the Marquesses due to doubts as to whether James Douglas should be included. John Sholto Douglas is therefore often identified as the 8th Marquess. He was educated at the Royal Naval College and married Sibyl Montgomery in 1866. The couple had four sons and one daughter and was divorced in 1887. Queensberry married Ethel Weeden in 1893, but they were divorced the following year.

Queensberry was a patron of sport and a noted boxing enthusiast. In 1866 he was one of the founders of the Amateur Athletic Club, now the Amateur Athletic Association of England, one of the first groups that did not require amateur athletes to belong to the upper-classes in order to compete. The following year the Club published a set of twelve rules for conducting boxing matches. The rules had been drawn up by John Graham Chambers but appeared under Queensberry's sponsorship and are universally known at the "Marquess of Queensberry Rules." Queensberry, a keen rider, was also active in fox hunting and owned several successful race horses.

In 1872, Queensberry was chosen by the members of the peerage of Scotland to sit in the British House of Lords as a representative peer. He served as such until 1880, when he was again nominated but refused to take the religious oath of allegiance to the Sovereign. An outspoken atheist, he declared that he would not participate in any "Christian tomfoolery" and that his word should suffice.

As a consequence neither he nor Charles Bradlaugh, who had also refused to take the oath after being elected to the House of Commons, were allowed to take their seats in Parliament. This prompted an apology from the new Prime Minister, William Gladstone. Bradlaugh was re-elected four times by the constituents of Northampton until he was finally allowed to take his seat in 1886, but Queensberry was never again sent to Parliament by the Scottish nobles.

In 1881, Queensberry accepted the presidency of the British Secular Union, a group that had broken away in 1877 from Bradlaugh's National Secular Society. In 1882, he was ejected from the theatre after loudly interrupting a performance of the play The Promise of May by Lord Tennyson, the Poet Laureate, because it included a villainous atheist in its cast of characters. Under the auspices of the British Secular Union, Queensberry wrote a pamphlet entitled The Religion of Secularism and the Perfectibility of Man. The Union, always small, ceased to function in 1884.

His divorces, militant atheism, and association with the boxing world made Queensberry an unpopular figure in London high society. In 1893 his eldest son, Francis Douglas, was created Baron Kelhead in the peerage of the United Kingdom, thus giving the son an automatic seat in the House of Lords, from which the father was excluded. This caused a bitter dispute between Queensberry and his son Francis, and also between Queensberry and Lord Rosebery, the patron who had promoted Francis's ennoblement and who shortly thereafter became Prime Minister.

In March 1895 Queensberry was sued for defamatory libel by Oscar Wilde, whom he had accused of "posing as a somdomite" (sic): Queensberry made the allegation because he was angered by Wilde's relationship with his son, Alfred Douglas. Soon after the trial opened, the libel case was withdrawn. Wilde was later convicted of gross indecency under the Criminal Law Amendment of 1885.

Lord Queensberry died in London, aged 55.