Thomas Gray was born in Cornhill, London, the son of an exchange broker and a milliner. He was the fifth of 12 children and the only child in his family to survive infancy. He lived with his mother after she left his abusive father. He was educated at Eton College where his uncle was one of the masters. He recalled his schooldays as a time of great happiness, as is evident in his Ode on a Distant Prospect of Eton College. Gray was a delicate and naturally scholarly boy who spent his time reading great literature and avoiding athletics. It was probably fortunate for the young and sensitive Gray that he was able to live in his uncle’s household rather than at college. He made three close friends at Eton: Horace Walpole, son of Prime Minister Robert Walpole, Thomas Ashton, and Richard West. The four of them prided themselves on their sense of style, their sense of humour, and their appreciation of beauty.

In 1734 Gray went up to Peterhouse, Cambridge. He found the curriculum dull. He wrote letters to his friends listing all the things he disliked: the masters ("mad with Pride") and the Fellows ("sleepy, drunken, dull, illiterate Things.") Supposedly he was intended for the law, but in fact he spent his time as an undergraduate reading classical and modern literature and playing Vivaldi and Scarlatti on the harpsichord for relaxation. In 1738 he accompanied his old school-friend Walpole on his Grand Tour, probably at Walpole's expense. They fell out and parted in Tuscany because Walpole wanted to attend fashionable parties and Gray wanted to visit all the antiquities. However, they were reconciled a few years later. Then, he wished his poems would become more popular.

He began seriously writing poems in 1742, mainly after his close friend Richard West died. He moved to Cambridge and began a self-imposed programme of literary study, becoming one of the most learned men of his time, though he claimed to be lazy by inclination. He became a Fellow first of Peterhouse, and later of Pembroke College, Cambridge. It is said that the change of college was the result of a practical joke. Terrified of fire, he had installed a metal bar by his window on the top floor of the Burrough’s building at Peterhouse, so that in the event of a fire he could tie his sheets to it and climb to safety.

Gray spent most of his life as a scholar in Cambridge, and only later in his life did he begin travelling again. Although he was one of the least productive poets (his collected works published during his lifetime amount to fewer than 1,000 lines), he is regarded as the predominant poetic figure of the mid-18th century. In 1757, he was offered the post of Poet Laureate, which he refused.

In 1762, the Regius chair of Modern History at Cambridge, a sinecure which carried a salary of £400, fell vacant after the death of Shallet Turner, and Gray's friends lobbied the government unsuccessfully to secure the position for him. In the event, Gray lost out to Lawrence Brockett, but he secured the position in 1768 after Brockett's death.

Gray was so self critical and fearful of failure that he only published thirteen poems during his lifetime and once wrote that he feared his collected works would be "mistaken for the works of a flea". Walpole said that "He never wrote anything easily but things of Humour."

Gray was also known as one of the "Graveyard poets" of the late 18th century, along with Oliver Goldsmith, William Cowper, and Christopher Smart. Gray most likely knew these men, sharing ideas about death, mortality, and the finality and sublimity of death.

It is believed that Gray wrote his masterpiece, the Elegy Written in a Country Churchyard, in the graveyard of the church in Stoke Poges, Buckinghamshire in 1750. The poem was a literary sensation when published by Robert Dodsley in February 1751 (see 1751 in poetry) and has made a lasting contribution to English literature. Its reflective, calm and stoic tone was greatly admired, and it was pirated, imitated, quoted and translated into Latin and Greek. It is still one of the most popular and most frequently quoted poems in the English language. In 1759 during the Seven Years War, before the Battle of the Plains of Abraham, British General James Wolfe is said to have recited it to his officers, adding: "Gentlemen, I would rather have written that poem than take Quebec tomorrow". The poem's famous depiction of an "ivy-mantled tow'r" could be a reference to the early-mideval St. Laurence's Church in Upton, Slough.The Elegy was recognised immediately for its beauty and skill. It contains many outstanding phrases which have entered the common English lexicon, either on their own or as referenced in other works. A few of these include:

• "The paths of glory"

• "Celestial fire"

• "Some mute inglorious Milton"

• "Far from the madding crowd"

• "The unlettered muse"

• "Kindred spirit"

Gray also wrote light verse, such as Ode on the Death of a Favourite Cat, Drowned in a Tub of Gold Fishes, a mock elegy concerning Horace Walpole's cat. After setting the scene with the couplet "What female heart can gold despise? What cat's averse to fish?", the poem moves to its multiple proverbial conclusion: "a fav'rite has no friend", "[k]now one false step is ne'er retrieved" and "nor all that glisters, gold". (Walpole later displayed the fatal china vase on a pedestal at his house in Strawberry Hill.) Gray’s surviving letters also show his sharp observation and playful sense of humour. He is also well known for his phrase,

• "where ignorance is bliss, 'tis folly to be wise,"

This is from his 1742 (see 1742 in poetry) Ode on a Distant Prospect of Eton College.

Gray himself considered his two Pindaric odes, The Progress of Poesy and The Bard, his best works. Pindaric odes are written with great fire and passion, unlike the calmer and more reflective Horatian odes such as Ode on a distant Prospect of Eton College. The Bard tells of a wild Welsh poet cursing Edward I after the conquest of Wales and prophesying in detail the downfall of the House of Plantagenet. It is very melodramatic, and ends with the bard hurling himself to his death from the top of a mountain.

When his duties allowed, Gray travelled widely throughout Britain to places like Yorkshire, Derbyshire and Scotland in search of picturesque scenery and ancient monuments. These things were not generally valued in the early 18th century, when the popular taste ran to classical styles in architecture and literature and people liked their scenery tame and well-tended. Some people have seen Gray’s writings on this topic, and the Gothic details that appear in his Elegy and The Bard as the first foreshadowing of the Romantic movement that dominated the early 19th century, when William Wordsworth and the other Lake poets had taught people to value the picturesque, the sublime, and the Gothic. Gray combined traditional forms and poetic diction with new topics and modes of expression and may be considered as a classically focussed precursor of the romantic revival.

Gray's connection to the Romantic poets is vexed. In the prefaces to the 1800 and 1802 editions of Wordsworths' and Samuel Taylor Coleridge's Lyrical Ballads, Wordsworth singled out Gray's "Sonnet on the Death of Richard West" to exemplify what he found most objectionable in poetry, declaring it was "Gray, who was at the head of those who, by their reasonings, have attempted to widen the space of separation betwixt prose and metrical composition, and was more than any other man curiously elaborate in the structure of his own poetic diction." Indeed, it was Gray who had written, in a letter to West, that "the language of the age is never the language of poetry."

Gray died on 30 July 1771 in Cambridge and was buried beside his mother in the churchyard of Stoke Poges, the setting for his famous Elegy. His grave can still be seen there. There is a plaque in Cornhill, marking his birthplace.