Bounds was born in Shelby County, rural Missouri to Thomas J. and Hatty Bounds. His father, Thomas J. Bounds, was instrumental in organizing Shelby County, Missouri, he was an original landholder in the county seat, Shelbyville, and he was a driving force in the building of the First Methodist Church in 1840. Because his father served as county clerk, the Bounds' home was used for court sessions. When Edward was fourteen years old, his father contracted tuberculosis and died.

Shortly after his father's death in 1849, Edward, his eldest brother (Charles), and several other relatives joined a wagon train and traveled to Mesquite Canyon in California in hopes of making a fortune in gold mining. After four unsuccessful years, they returned to Missouri and Edward studied law in Hannibal, Missouri. He became the state's youngest practicing lawyer at age nineteen. Although apprenticed as an attorney, Bounds felt called to Christian ministry in his early twenties during the Third Great Awakening. Following a brush arbor revival meeting led by Evangelist Smith Thomas, he closed his law office and moved to Palmyra, Missouri to enroll in the Centenary Seminary. Two years later, in 1859 at the age of 24, he was ordained by his denomination and was named pastor of the nearby Monticello, Missouri Methodist Church.

E.M. Bounds did not support slavery. But, because he was a pastor at a congregation in the recently formed Methodist Episcopal Church South, his name was included in a list of 250 names who were to take an oath of allegiance and post a $500 bond. Edward saw no reason for a U.S. Citizen to take such an oath, he was morally opposed to the Union raising funds in this way, and he didn't have the $500. Bounds and the others on the list were arrested in 1861 by Union troops, and Bounds was charged as a Confederate sympathizer. He was held with other non-combatants in a Federal prison in St. Louis for a year and a half. He was then transferred to Memphis and released in a prisoner exchanged between the Union and the Confederacy.

He became a chaplain in the Confederate States Army (3rd Missouri Infantry CSA) During the Second Battle of Franklin, Bounds suffered a severe forehead injury from a Union saber, and he was taken prisoner. On June 28, 1865, Bounds was among Confederate prisoners who were released upon the taking of an oath of loyalty to the United States.

Upon his release as a prisoner of the Union Army, he felt compelled to return to war-torn Franklin and help rebuild it spiritually, and he became the pastor of the Franklin Methodist Episcopal Church, South. His primary method was to establish weekly prayer sessions that sometimes lasted several hours. Bounds was regionally celebrated for leading spiritual revival in Franklin and eventually began an itinerant preaching ministry throughout the country.

After serving several important churches in St. Louis and other places, south, he became Editor of the St. Louis Christian Advocate for eight years and, later, Associate Editor of The Nashville Christian Advocate for four years. The trial of his faith came to him while in Nashville, and he quietly retired to his home without asking even a pension. His principal work in Washington, Georgia (his home) was rising at 4 am and praying until 7 am. He filled a few engagements as an evangelist during the eighteen years of his lifework. While on speaking engagements, he would not neglect his early morning time in prayer, and cared nothing for the protests of the other occupants of his room at being awakened so early. No man could have made more melting appeals for lost souls and backslidden ministers than did Bounds. Tears ran down his face as he pleaded for us all in that room.

According to people who were constantly with him, in prayer and preaching, for eight years "Not a foolish word did we ever hear him utter. He was one of the most intense eagles of God that ever penetrated the spiritual ether. He could not brook delay in rising, or being late for dinner. He would go with me to street meetings often in Brooklyn and listen to the preaching and sing with us those beautiful songs of Wesley and Watts. He often reprimanded me for asking the unconverted to sing of Heaven. Said he: 'They have no heart to sing, they do not know God, and God does not hear them. Quit asking sinners to sing the songs of Zion and the Lamb.'"

Bounds' first marriage was to Emma (Emmie) Elizabeth Barnett from Washington, Georgia on September 19, 1876. They had two daughters, Celeste and Corneille, and a son, Edward. Emmie died on February 18, 1886. Twenty months later, Edward married Emmie's cousin, Harriet (Hattie) Elizabeth Barnett in 1887. To them were born three sons (Samuel, Charles, and Osborne) and three daughters (Elizabeth, Mary, and Emmie). His son Edward, by his first wife, died at the age of six, and his son Charles, by his second wife, died eight days after his first birthday.

E.M. Bounds died on August 24, 1913 in Washington, Georgia. The funeral was held on the following day.

Only two of Bounds' books were published before he died. After his death, Rev. Claudius (Claude) Lysias Chilton, Jr., grandson of William Parish Chilton and admirer of Bounds, worked on preserving and preparing Bounds' collection of manuscripts for publication. By 1921 more editorial work was being done by Rev. Homer W. Hodge.

Chilton said of his books:

Nonfiction

• Power Through Prayer ( e-text)
• Prayer and Praying Men ( e-text)
• Purpose in Prayer ( e-text)
• The Essentials of Prayer ( e-text)
• The Necessity of Prayer ( e-text)
• The Possibilities of Prayer ( e-text)
• The Reality of Prayer ( e-text)
• The Weapon of Prayer ( e-text)
• Preacher and Prayer ( Google Books)
• Satan: His Personality, Power and Overthrow ( online_text)
• Heaven: A Place - A City - A Home ( online_text)