Wiebe was born at Speedwell, near Fairholme, Saskatchewan in what would later become his family’s chicken barn. For thirteen years he lived in an isolated community of about 250 people, as part of the last generation of homesteaders to settle the Canadian west. He did not speak English until age six since Mennonite at that time customarily spoke Plautdietsch (Low German) at home and standard German at Church. He attended the small school three miles from his farm and the Speedwell Mennonite Brethren Church.

He received his B.A. in 1956 from the University of Alberta and then studied under a Rotary International Fellowship at the University of Tübingen in West Germany, near Stuttgart. In 1958 he married Tena Isaak; they now have two children. In Germany, he studied literature and theology and travelled to England, Austria, Switzerland and Italy.

Wiebe's novels include Peace Shall Destroy Many (1962), First and Vital Candle (1966), The Blue Mountains of China (1970), The Temptations of Big Bear (1973), The Scorched-wood People (1977), The Mad Trapper (1980), My Lovely Enemy (1983), A Discovery of Strangers (1994), and Sweeter Than All the World (2001). He has also published collections of short stories, essays, and children's books. In 2006 he published a volume of memoirs about his childhood, entitled Of This Earth: A Mennonite Boyhood in the Boreal Forest.

Wiebe taught at Goshen College in Goshen, Indiana from 1963 to 1967, and he has travelled widely. He is deeply committed to the literary culture of Canada and has shown a particular interest in the traditions and struggles of people in the Prairie provinces, both whites and Aboriginals.

Wiebe won the Governor General's Award for Fiction twice, for The Temptations of Big Bear (1973) and A Discovery of Strangers (1994). He was awarded the Royal Society of Canada's Lorne Pierce Medal in 1986. In 2000 he was made an Officer of the Order of Canada. In 2003 Wiebe was a member of the jury for the Giller Prize.