The Nation reported that Bilquis Edhi, the wife of Edhi in an interview to a TV channel said 'We never even celebrated his birthday while he was alive. We were unaware of the day he was born." Daily Times reported "There is some confusion over his actual birth date as Edhi himself was unsure and believed he was born between 1926 and 1928."

Edhi in his autobiography himself revealed that he didn't know his date of birth. But according to media reports published following his death, he was born on 1 January 1928. However, in 2017, Google Doodle marked his date of birth as 28 February 1928 following which several reports emerged in favour of 28 February 1928. The Sun noted "Google says Edhi celebrated his birthday on February 28, however reports suggest he was in fact born on January 1." Metro noted "There has been uncertainty about when his birthday is. Some have reported it as 1 January in the past – however, now it is widely believed to be 28 February." Wired noted that "Previous reports, including those surrounding his funeral, state Edhi was born on January 1. An obituary in The Guardian doesn't list a birthday date, simply putting circa 1926. The date January 1 can, at times, be used in place of a specific date when only a year is known, but this tends to be avoided due to the confusion it can cause. However, Google has since told WIRED it got the February 28 date directly from Edhi's family."

He was born in Bantva in the Gujarat, British India into a Memon family. In his biography, he said his mother would give him 1 paisa for his meals and another to give to a poor child. When he was eleven, his mother became paralysed from a stroke and she died when Edhi was 19. His personal experiences and care for his mother during her illness caused him to develop a system of services for old, mentally ill and challenged world. The partition of India led Edhi and his family to migrate to Pakistan in 1947. He then shifted to Karachi to work in a market at a wholesale shop. He initially started as a peddler, and later became a commission agent selling cloth in the wholesale market in Karachi. After a few years, he established a free dispensary with help from his community.

In 1965 Edhi married Bilquis, a nurse who worked at the Edhi dispensary. They had four children, two daughters and two sons. Bilquis runs the free maternity home at the headquarters in Karachi and organizes the adoption of abandoned babies including those born out of wedlock. Edhi was known for his ascetic lifestyle, owning only two pairs of clothes, never taking a salary from his organisation and living in an apartment next to his organization's office. Edhi stated that he had "never been a very religious person."

In the early 1980s, Edhi was arrested by Israeli troops while entering Lebanon. In 2006, he was detained in Toronto, Ontario, Canada, for 16 hours. In January 2008, U.S. immigration officials interrogated Edhi at the John F. Kennedy Airport in New York City for over eight hours and seized his passport and other documents. When asked about the frequent detention Edhi said, "The only explanation I can think of is my beard and my dress."As he was a Muslim and he was trying to help people as he had a beard the "authorities" thought of him as a terrorist.

Edhi maintained a hands-off management style and was often critical of the clergy and politicians. Edhi was a strong proponent of religious tolerance in Pakistan and extended support to the victims of Hurricane Katrina and the 1985 famine in Ethiopia. Edhi was nominated several times for the Nobel Peace Prize, including by Malala Yousafzai. Edhi received several awards including Gandhi Peace Award and the UNESCO-Madanjeet Singh Prize.

The Edhi Foundation, founded by Edhi, runs the world's largest volunteer ambulance Service (operating 1,500 of them) and offers 24-hour emergency services. It also operates free nursing homes, orphanages, clinics, women's shelters, and rehab centres for drug addicts and mentally ill individuals. It has run relief operations in Africa, Middle East, the Caucasus region, eastern Europe, and the United States where it provided aid following Hurricane Katrina in 2005. His son Faisal Edhi, wife Bilquis Edhi, and daughters managed the daily operations of the organization during his ill health. He is often referred to as Pakistan's version of Mother Teresa, and the BBC wrote that he was considered "Pakistan's most respected figure and was seen by some as almost a saint."

He told NPR in 2009 that "I saw people lying on the pavement ... The flu had spread in Karachi, and there was no one to treat them. So I set up benches and got medical students to volunteer. I was penniless and begged for donations on the street. And people gave. I bought this 8-by-8 room to start my work."

In 2011 Yousaf Raza Gilani, the Prime Minister of Pakistan recommended Edhi for a nomination of Nobel Peace Prize. Again in early 2016, a petition signed by 30,000 for a Nobel Peace prize to Edhi was moved by Ziauddin Yousafzai, the father of Malala Yousafzai. In her condolence message on Edhi's death, broadcast by BBC Urdu Service Malala quoted that "as a Nobel Peace Prize winner, I hold the right to nominate people for the prize and I have nominated Abdul Sattar Edhi".

On 25 June 2013, Edhi's kidneys failed; it was announced that he would be on dialysis for the rest of his life unless he found a kidney donor. Edhi died on 8 July 2016 at the age of 88 due to kidney failure after having been placed on a ventilator. His last wishes included the request that his organs were to be donated but due to his ill health, only his corneas were suitable. He was laid to rest at the Edhi Village Karachi.

On 4 July 2016, Defence Housing Authority announced its decision to rename 5 km long Beach Avenue on Seaview as 'Abdul Sattar Edhi Avenue' in recognition of the welfare services by Edhi.

On 31 March 2017, a ₨. 50 cupro-nickel commemorative coin was issued upon the recommendation of the State Bank of Pakistan to the Prime Minister Sharif, who decided to commemorate Edhi’s services on the national level. Edhi became the only social worker and the fifth Pakistani personality to have been honoured with a commemorative coin.