Marshall was the son of Daniel M. Marshall, a physician, and Martha Patterson. Graduating from Wabash College in 1873, he was admitted to the Indiana bar in 1875 and practiced law for almost 35 years in Columbia City (1875–1909). A forceful and entertaining speaker, he was elected governor of Indiana in 1908 and during the next four years sponsored an extensive program of progressive social legislation. Largely because of his record in office, his name was presented as a favourite-son candidate for president at the Democratic (Democratic Party) National Convention of 1912. After Wilson (Wilson, Woodrow) won the nomination on the 46th ballot, his advisers—who had secretly promised Marshall the vice presidency in return for supporting Wilson—suggested Marshall as vice president. Despite Wilson's opinion of Marshall as a “very small calibre man,” electoral calculations eventually swayed him to support Marshall's nomination.

Marshall's personal influence on legislation was a powerful aid to the Wilson administration, although some opponents viewed him as a dangerous radical. He advocated strict neutrality prior to World War I—a stand he later regretted—supported American membership in the League of Nations (Nations, League of), and opposed woman suffrage. When Wilson suffered a stroke that partially paralyzed him in 1919, Marshall steadfastly refused to assume the powers of the presidency without written requests from first lady Edith Wilson (Wilson, Edith) and the president's doctor and a congressional resolution, fearing that he would be accused of “longing for 【Wilson's】 place.” While Wilson was incapacitated, Marshall presided over cabinet meetings but made no major decisions. Although he was discussed as a potential presidential candidate in both 1920 and 1924, Marshall never actively sought the nomination. His homespun philosophy and humour are recorded in Recollections of Thomas R. Marshall, Vice-President and Hoosier Philosopher: A Hoosier Salad (1925).