Born into a military family with literary inclinations, Benét was reared on army posts. His father read poetry aloud to Stephen, an older brother, William Rose, and a sister, Laura, all of whom became writers. Stephen published his first book at age 17. Civilian service during World War I interrupted his education at Yale University. He received his M.A. degree after the war, submitting his third volume of poems instead of a thesis.

After publishing the much-admired Ballad of William Sycamore 1790–1880 (1923), three novels, and a number of short stories, he went to France, where he wrote John Brown's Body (1928), his most widely read work. Dramatized by Charles Laughton (Laughton, Charles) in 1953, it was performed across the United States.

A Book of Americans (1933), poems written with his wife, the former Rosemary Carr, brought many historical characters to life for American schoolchildren. Benét's preoccupation with historical themes was also the basis for Western Star, an ambitious epic verse narrative on American history that Benét first planned in 1934 to consist of as many as five books but was left uncompleted at the time of his death. Book I, complete in itself and finished in 1942, was published posthumously. In all, Benét published more than 17 volumes of prose and verse. His best-known short story, "The Devil and Daniel Webster" (1937), a humorous treatment of a theme from folklore, was the basis for a play by Archibald MacLeish (MacLeish, Archibald), an opera by Douglas Moore (Moore, Douglas Stuart), and two motion pictures (1941, 2001).