L'Hospital studied law at Toulouse but was forced into exile because of his father's association with the traitor Charles de Bourbon; he subsequently continued his legal studies at Padua and Bologna. He was able to return to France about 1534, and in 1537 he became a councillor in the Parlement of Paris (supreme court). Henry II made him his envoy to the Council of Trent in 1547, and in 1553, on the recommendation of Charles, cardinal de Lorraine, he was made a master of requests, responsible for petitions to the king. In 1555 he became first president of the Chambre des Comptes. In 1560, during the brief reign of Francis II, he was made chancellor of France and was retained in that position by the regent, Catherine de Médicis.

L'Hospital played an important role in both the shaping and the implementation of government policy. As the Huguenots and Catholics prepared to fight each other, L'Hospital advocated a policy of religious toleration favoured by the regent, Catherine, and presented the government's policies in numerous speeches to the various provincial estates and other local assemblies. But he was not merely expressing Catherine's policies: a perusal of his works shows that much government policy was indeed his own policy. His Traicté de la réformation de la justice (“Treatise on the Reform of Justice”) and his Mémoire sur la nécessité de mettre un terme à la guerre civile (c. 1570; “Memoir on the Necessity of Putting an End to the Civil War”) are the most complete presentations of the case for toleration of his time. He argued that the ruler should not favour one religion over another but should safeguard the welfare of his subjects as a whole. While he favoured unity of religion, he believed that if force were used the opposite effect would be achieved.

His philosophies of toleration and moderation and his policies in office caused him to be considered a founder of the Politiques, the moderate Roman Catholic group that tried to bring peace to France during the later years of the Wars of Religion. L'Hospital disapproved of rebellion as a means of bringing about change, and he loathed tyrannicide; he regarded the monarchy as divinely instituted and the king as the supreme lawgiver, but he believed that the king should remain in close touch with his subjects by summoning the States General frequently.

During his term of office he worked hard for judicial reform and in 1566 promoted the Ordonnance de Moulins, which went far to rectify many problems in judicial administration and also stipulated policies for the administration and centralization of the royal domain (crown lands). In September 1567 civil war broke out again, and Catherine lost confidence in L'Hospital's policy of toleration. Seeing that he had lost favour, he asked to be dismissed and then retired (1568) to his estate, where he spent his remaining years writing. His Oeuvres complètes were published in 1824–26.