The son of an impoverished farmer and boatman, Vanderbilt quit school at age 11 to work on the waterfront. In 1810 he purchased his first boat with money borrowed from his parents. He used the boat to ferry passengers between Staten Island and New York City; then, during the War of 1812, he enlarged his operation to a small fleet with which he supplied government outposts around the city.

Vanderbilt expanded his ferry operation still further following the war, but in 1818 he sold all his boats and went to work for Thomas Gibbons as steamship captain. While in Gibbons' employ (1818–29), Vanderbilt learned the steamship business and acquired the capital that he used in 1829 to start his own steamship company.

During the next decade, Vanderbilt gained control of the traffic on the Hudson River by cutting fares and offering unprecedented luxury on his ships. His hard-pressed competitors finally paid him handsomely in return for Vanderbilt's agreement to move his operation. He then concentrated on the northeastern seaboard, offering transportation from Long Island to Providence and Boston. By 1846 the Commodore was a millionaire.

The following year, he formed a company to transport passengers and goods from New York City and New Orleans to San Francisco via Nicaragua. With the enormous demand for passage to the West Coast brought about by the 1849 gold rush, Vanderbilt's Accessory Transit Company proved a huge success. He quit the business only after his competitors—whom he had nearly ruined—agreed to pay him $40,000 (later it rose to $56,000) a month to abandon his operation.

By the 1850s he had turned his attention to railroads (railroad), buying up so much stock in the New York and Harlem Railroad that by 1863 he owned the line. He later acquired the Hudson River Railroad and the New York Central Railroad and consolidated them in 1869. When he added the Lake Shore and Michigan Southern Railroad in 1873, Vanderbilt was able to offer the first rail service from New York City to Chicago.

During the last years of his life, Vanderbilt ordered the construction of Grand Central Terminal in New York City, a project that gave jobs to thousands who had become unemployed during the Panic of 1873. Although never interested in philanthropy while acquiring the bulk of his huge fortune, later in his life he did give $1,000,000 to Central University in Nashville, Tenn. (later Vanderbilt University). In his will he left $90,000,000 to his son William Henry, $7,500,000 to William's four sons, and—consistent with his lifelong contempt for women—the relatively small remainder to his second wife and his eight daughters.