The son of an industrial chemist, Wilson was educated at the University of Oxford, where, as a fellow of University College (1938–39), he collaborated with Sir William (afterward 1st Baron) Beveridge on work that led to Beveridge's epochal report (1942) advocating social insurance and other welfare measures. On the outbreak of World War II, Wilson was drafted into the civil service. As director of economics and statistics (1943–44) at the Ministry of Fuel and Power, he produced a study of the mining industry. His book New Deal for Coal (1945) was the basis of the Labour Party's plans for nationalizing the coal mines.

Wilson was first elected to the House of Commons in 1945 and was appointed president of the Board of Trade in 1947, becoming, at age 31, Britain's youngest cabinet minister since William Pitt the Younger in 1792. Wilson resigned his post in April 1951 in protest against the introduction of national health service charges to finance rearmament for the Korean War. He became Labour's spokesman on finance and foreign affairs, and in 1960 he mounted a left-wing challenge to Hugh Gaitskell for the party leadership. This failed, but after Gaitskell died in 1963, Wilson was elected leader of the Labour Party. He worked to consolidate the party, and after Labour won the general election of 1964, he became prime minister.

In 1965 Wilson was unable to avert an illegal declaration of independence by the white minority government of the British colony of Rhodesia, and his subsequent efforts to topple the rebel government by the use of economic sanctions rather than by military force failed. Wilson steered Britain clear of direct military involvement in the Vietnam War, though he gave verbal support to the U.S. war effort. His government outlawed capital punishment (1965) and began the Open University for continuing education. Wilson had widened his party's voting majority in the general election of 1966, but his popularity declined in the late 1960s, partly because of his assumption of direct responsibility for the economy shortly before the pound was devalued (Nov. 18, 1967). With unemployment rising and trade-union disputes on the increase, the Conservatives won the general election of June 1970, and Wilson resigned.

In the general election of February 1974 the Conservatives won a plurality of the popular vote but were unable to form a coalition, so Wilson formed a government that March. This administration lasted until October, when he won a narrow majority after the second general election in eight months. Wilson's adroitness in holding together a party of social democrats, trade unionists, and leftists was never more severely tested than in 1975. His party was deeply divided over the question of Britain's new membership in the European Economic (European Community) Community (EEC). By the June referendum on EEC membership, Wilson was able not only to confirm British membership in the EEC by an overwhelming majority but also to end an acrimonious, long-running quarrel inside the party. In Britain, however, economic difficulties continued, and on March 16, 1976—with the pound floundering and a crucial budget soon to be presented—Wilson announced his resignation to a stunned cabinet. The motives behind this resignation, which took place three years before the next scheduled election, remain unclear. In April the queen appointed Wilson a Knight of the Garter, and in 1983 he was created a life peer.

A consummate politician, Wilson won four of five general elections, more than any other postwar British leader of any party. His own version of politics in his time may be found in his The Labour Government, 1964–1970 (1971), The Governance of Britain (1976), and Final Term: The Labour Government 1974–76 (1979).