After military service (1829–37) and two explorations in Western Australia (1837–39), Grey was made governor of South Australia in 1840. His advocacy of rapid assimilation of natives impressed the British Colonial Office, and when war broke out in New Zealand between the Maoris and British settlers over land rights, he was named governor there. In his first term he established peace and became a pioneer scholar of the Maori culture, writing a study of their mythology and oral history in 1854. He was knighted in 1848.

In 1854 Grey was appointed governor of Cape Colony, where his resolution of hostilities between the natives and European settlers was praised by both sides. He was sent to New Zealand again in 1861, where war had broken out between settlers and the Maoris. Although Maori resistance was quelled by the mid-1860s after a decade of fighting, Grey was caught between competing authorities and was unable to carry out much of his legislative program. Grey was a member of the New Zealand legislature from 1874 to 1894 and served as premier (1877–79).