Bill Richardson was born in Pasadena, California. His father, William Blaine Richardson Jr. (died in 1972) of New England Yankee and Mexican descent, was an American Citibank executive who grew up in Boston, Massachusetts and lived and worked in Mexico City. His mother, María Luisa López-Collada Márquez is the Mexican daughter of a Spanish father from Villaviciosa, Asturias, Spain and a Mexican mother and was his father's secretary. Richardson's father was born in Nicaragua. Just before Richardson was born, his father sent his mother to California to give birth because, as Richardson explained, "My father had a complex about not having been born in the United States." Richardson, a U.S. citizen by birthright, was raised during his childhood in Mexico City. He was raised Roman Catholic. At age 13, Richardson's parents sent him to Massachusetts to attend a preparatory school, Middlesex School in Concord, Massachusetts, where he played baseball as a pitcher. He entered Tufts University in 1966 where he continued to play baseball.

Richardson's original biographies stated that he had been drafted by the Kansas City Athletics and the Chicago Cubs to play professional baseball, but a 2005 Albuquerque Journal investigation revealed that he never was on any official draft. Richardson acknowledged the error which he claimed was unintentional, saying that he had been scouted by several teams and told that he "would or could" be drafted, but was mistaken in saying that he was actually drafted.

In 1967, he pitched in the amateur Cape Cod Baseball League for the Cotuit Kettleers in Cotuit, Massachusetts. A Kettleers program included the words "Drafted by K.C." The information which, according to the investigation, was generally provided by the players or their college coaches. Richardson said:

The company in question, CDR, was alleged to have "funneled" more than $100,000 in donations to Richardson's PAC in exchange for state construction projects. Richardson said when he withdraw his Commerce Secretary nomination that he was innocent; his popularity then slipped below 50% in his home state.  In August 2009, federal prosecutors dropped the pending investigation against the governor, and there has been speculation in the media about Richardson's career after his second term as New Mexico governor concludes.

On March 18, 2009, Governor Richardson's office confirmed that he had signed a bill repealing the death penalty, making New Mexico the second U.S. state (after New Jersey) to repeal the death penalty by legislative means since the 1960s. Richardson was subsequently honored with the 2009 Human Rights Award by Death Penalty Focus.

In its April 2010 report, ethics watchdog group Citizens for Responsibility and Ethics in Washington named Richardson one of 11 "worst governors" in the United States because of various ethics issues throughout Richardson's term as governor. Some of Richardson's ethics lapses cited by the watchdog include:

• Allowed political allies to benefit from firms connected to state investments
• Allowed pay-to-play scandals to plague his administration
• Rewarded close associates with state positions or benefits, including providing a longtime friend and political supporter with a costly state contract
• Fell short on efforts to make state government more transparent

Richardson was a candidate for the Democratic nomination for the 2008 presidential election but dropped out on January 10, 2008 after lackluster showings in the first primary and caucus contests. Despite his long history and friendship with the Clinton family, Richardson endorsed Barack Obama for the Democratic nomination on March 21, 2008. Commentator and Clinton ally James Carville famously compared Richardson to Judas Iscariot for the move. First a Tense Talk With Clinton, Then Richardson Backs Obama - New York Times Richardson responded in a Washington Post article, feeling "compelled to defend [himself] against character assassination and baseless allegations."

Richardson was a rumored Vice Presidential candidate for Senator and Democratic presumptive nominee Barack Obama and was fully vetted by the Obama campaign, before Obama chose Joe Biden on August 23, 2008.

Following Barack Obama's victory in the 2008 presidential election, Richardson's name was frequently mentioned as a possible Cabinet appointment in the incoming Obama administration. Most of this speculation surrounded the position of Secretary of State, given Richardson's background as a diplomat. Richardson did not publicly comment on the speculation.

It was widely reported, and eventually officially announced, that Hillary Clinton was Obama's nominee for Secretary of State. Around this time, it was reported that Richardson was being strongly considered for the position of Commerce Secretary. On December 3, 2008, Obama tapped Richardson for the post.

On January 4, 2009, Richardson withdrew his name as Commerce Secretary nominee because of the federal grand jury investigation into pay-to-play dealings. The New York Times had reported in late December that the grand jury investigation issue would be raised at Richardson's confirmation hearings.

Richardson is credited with having written two books:

• Between Worlds: The Making of an American Life autobiography, published March 2007 - Ghost Writer, Mike Ruby, former co-editor of U.S. News & World Report, Missouri School of Journalism alumnus.
• Leading by Example: How We Can Inspire an Energy and Security Revolution released October 2007