Percy was born on March 28, 1979 in Eugene, Oregon, and in his early life lived briefly in Hawaii. His family moved to Tumalo, Oregon when Percy was in the fourth grade and Percy attended a private school in Sunriver, Oregon.

From an early age he demonstrated interest and aptitude in writing, but considered archeology a more practical career and spent several summers doing related work as an intern, then began study in that field at Brown University. Eventually finding archeology less satisfying than anticipated, and at the urging of his girlfriend (now wife) Lisa, Percy changed course and focused on writing as a career. Upon graduating from Brown, he attended Southern Illinois University, earning his Master of Fine Arts in Creative Writing, with a teaching fellowship. Percy thereafter wrote short stories prolifically and his submissions to literary journals and magazines were soon accepted for publication.

In addition to writing for publication, Percy teaches writing. After teaching at the University of Wisconsin—Stevens Point and Marquette University in Wisconsin, Percy joined the faculty at Iowa State University in fall 2008. In 2010, Benjamin Percy was the guest judge for the Flatmancrooked Fiction Prize. Percy and his wife Lisa had a son, Connor, in 2006.

Percy's fiction has been published in numerous literary journals and magazines. His first collection of stories, The Language of Elk, was published by the Carnegie Mellon University Press in 2006. His short story, Refresh, Refresh first appeared in The Paris Review and won the Pushcart Prize for 2006. It was also included in Best American Short Stories 2006. At a reading of this story at Symphony Space for the NPR radio program Selected Shorts, the editor for the 2006 'Best American collection, Ann Patchett, indicated that she considered the story to be the best in the collection.

Percy's fiction draws its inspiration primarily from the High Desert region of Central Oregon from which he hails. Percy says, "I think I'm writing about it with a mythic voice. My stories are about bigfoot and bearded ladies, horse ranches, marijuana colonies and elk-hunting resorts. And I'm writing about all these things with a salty, mystical voice (that) I hope partners the material and the landscape."

In 2007, Percy was awarded the annual Plimpton Prize by The Paris Review, granted to an emerging author who has written for that publication.

Author Anthony Doerr writes that Percy's "stories crackle with energy and violence and a furious beauty."

In 2008, Percy was one of the winners of the Whiting Writers' Award, given annually by The Mrs. Giles Whiting Foundation. The prize awards $50,000 for poets, fiction and nonfiction writers, and playwrights "of exceptional talent and promise in early career." The foundation, which supports the humanities and writing, was established in 1963 by Flora E. Whiting, and its writing prize was first awarded in 1985.

In addition to his fiction writing, Percy writes book reviews for The Capital Times.