The son of a clergyman, Farquhar entered Trinity College, Dublin, as a sizar (one who received a college allowance in return for performing menial duties), but he preferred working as an unsuccessful actor at the Smock Alley Theatre in Dublin. During a performance of John Dryden's Indian Emperour, he failed to distinguish between a tipped foil and a deadly rapier, gravely wounding a fellow actor. After this incident he abandoned acting, and, encouraged by a leading actor, Robert Wilks, with whom he had acted in Dublin, Farquhar decided to go to London to write comedy. His early plays were primarily spirited variations on a theme: young men have their fling for four acts and reform, unconvincingly, in the fifth. The plays have freshness, however, as well as wit and a lively human sympathy.

His first play, Love and a Bottle, was well received at London's Drury Lane Theatre in 1699 and was followed in the same year by The Constant Couple. A sequel to the latter, Sir Harry Wildair, appeared in 1701. Between 1702 and 1704 he wrote The Inconstant (adapted from John Fletcher's Wild-Goose Chase), The Twin-Rivals, and The Stage-Coach, a farce translated from French.

Farquhar's real contribution to the English drama came in 1706 with The Recruiting Officer and, in the following year, with The Beaux' Stratagem, which he finished on his deathbed. In these plays he introduced a verbal vigour and love of character that are more usually associated with Elizabethan dramatists.