Jones was the 9th of 12 children of migrant farmworkers. His parents moved from rural Florida when he was three years old, and he grew up in Wayland, N.Y., just south of Rochester. He attended the State University of New York at Binghamton, where he became interested in movement and dance. There he met Arnie Zane, who became his partner in business and in life. With Lois Welk and Jill Becker, the two men formed the American Dance Asylum in 1973 and started choreographing works that tested the boundaries of modern dance. They scandalized some audiences by partnering male dancers, and they addressed subjects such as racism and AIDS. Much of their work incorporated multimedia elements such as spoken narrative and videotape, and they examined through movement autobiographical elements of their lives.

In 1982 Jones and Zane formed Bill T. Jones/Arnie Zane & Company, later called the Bill T. Jones/Arnie Zane Dance Company. (The company's name remained the same even after Zane's death from AIDS in 1988.) The book Body Against Body: The Dance and Other Collaborations of Bill T. Jones and Arnie Zane (1989), which the two men cowrote, examines their work together. In the wake of Zane's death and the death of another member of the company, Jones (who was also diagnosed as HIV-positive) created some of his most powerful works, including Last Supper at Uncle Tom's Cabin/The Promised Land (1990) and Still/Here (1994).

Jones received a number of honours, including a MacArthur fellowship (1994) and the Dorothy and Lillian Gish Prize (2003). In 2007 he earned a Tony Award for best choreography for his work in the musical Spring Awakening. Based on Frühlings Erwachen (1891), a tragedy by German dramatist Frank Wedekind (Wedekind, Frank), the musical dealt with adolescent sexual awakening and the damage that can be caused by a repressive and hypocritical society. Jones's memoir, Last Night on Earth (1995; with Peggy Gillespie), is a compelling narrative of his life that reveals issues that animated and motivated him.