Educated in law and philosophy in London, Danquah established a private law practice after his return to the Gold Coast (later Ghana) in 1927. He founded a newspaper, the Times of West Africa, in 1931 and served as secretary-general of the Gold Coast Youth Conference (1937–47).

Danquah actively sought constitutional reforms in the early 1940s and became a member of the Legislative Council in 1946. In 1947 he helped found the moderate United Gold Coast Convention (UGCC), a party mainly of the westernized elements of Gold Coast society that demanded eventual self-government. Nkrumah was asked to be secretary-general, but in 1949 he left the UGCC to found the more radical and mass-oriented Convention People's Party (CPP). Meanwhile, Danquah and several other UGCC members had joined an official commission on constitutional reform, which probably contributed to a loss of mass support; CPP leaders publicly accused him of selling out.

Danquah was elected to the Legislative Assembly in 1951, but he failed to be reelected in 1954 and 1956. Nevertheless, in 1960 he decided to run against Nkrumah for president; he received only 10 percent of the vote, however. Danquah continued to attack the dictatorial aspects of Nkrumah's government, and in 1961 he was imprisoned under the Preventive Detention Act. Released in 1962 and chosen president of the Ghana Bar Association, he was again imprisoned early in 1964 and died a year later.