The son of a British official who travelled widely throughout the empire, Oliphant received a desultory education; he was called to the colonial bar but soon gave up the law for a life of adventure. Before the age of 24 his travels had provided material for two books, a Journey to Khatmandu (1852) and The Russian Shores of the Black Sea in the Autumn of 1852, with a Voyage Down the Volga, and a Tour Through the Country of the Don Cossacks (1853). Later experiences in various parts of the world, as secretary to the diplomat James Bruce, earl of Elgin, as war correspondent of The Times, and as unofficial British observer and (briefly) first secretary of the British legation in Japan, are recorded with verve in Episodes in a Life of Adventure (1887) and other books. The Narrative of the Earl of Elgin's Mission to China and Japan (1859) gives a fascinating account of 19th-century gunboat diplomacy. In 1865 his satirical novel of London society, Piccadilly: A Fragment of Contemporary Biography, was serialized, and in the same year he became a Conservative member of Parliament.

In 1867 Oliphant went to the U.S. and joined the Brotherhood of the New Life, first at Amenia and then at Brocton, N.Y., founded by the spiritualist “prophet” T.L. Harris, to whom he signed over his fortune and to whose rule he submitted until 1881. In 1878 he proposed to Disraeli and Robert Cecil, 3rd marquess of Salisbury, a plan for the Jewish colonization of Palestine (he was not Jewish himself). The plan was well received by Salisbury and by eastern European Jews but was refused by the sultan of Turkey, ruler of Palestine. In 1882 Oliphant and his wife settled in Haifa, where they formed a small community and wrote together the esoteric Sympneumata; or, Evolutionary Forces Now Active in Man (1885)—supposedly a piece of automatic writing pleading for a purified sex life. He published two further novels, Altiora Peto (1883) and Masollam: A Problem of the Period (1886), the latter of which contains a portrait of Harris. A biography by the novelist Margaret Oliphant (who was distantly related) was published in 1891.