Campbell was born Benny Campbell in Auburn, California. His mother, Mary Vierra (Vieira), was a Portuguese immigrant who had come with her mother to the U.S. at age six through Ellis Island, (according to Campbell, his maternal grandfather had entered the United States some time before.) The Vierra family settled in the large Portuguese community near Sacramento. When Mary Vierra contracted tuberculosis in her youth, she was forced to convalesce at a nearby hospital, often for months at a time during treatment. It was there that she met an American Indian patient Albert Campbell, who was at the hospital for alcoholism treatment. Albert Campbell was of predominantly Northern Cheyenne descent but, according to Nighthorse Campbell biographer Herman Viola, Albert Campbell spent much of his youth in Crow Agency boarding school and may have had some Pueblo Indian and Apache Indian blood in his background as well. The couple married in 1929, and Campbell was born in 1933.

Campbell attended Placer High School, dropping out in 1951 to join the U.S. Air Force. He was stationed in Korea during the Korean War as an air policeman; he left the Air Force in 1953 with the rank of Airman Second Class, as well as the Korean Service Medal and the Air Medal. While in the Air Force, Campbell obtained his GED and, following his discharge, used his G.I. Bill to attend San Jose State University, where he graduated in 1957 with a Bachelor of Arts in Physical Education and Fine Arts.

While in college, Campbell was a member of the San Jose State judo team, coached by Future USA Olympic coach Yosh Uchida. While training for the Olympic Games, Campbell attended Meiji University in Tokyo, Japan as a special research student from 1960-1964. The Meiji team was world-renowned and Campbell credited the preparation and discipline taught at Meiji for his 1961, 1962, and 1963 U.S. National titles and his gold medal in the 1963 Pan-American Games. In 1964, Campbell competed in judo at the 1964 Summer Olympics in Tokyo. He suffered an injury and did not win a medal. He broke his ankle and was out for two years.

In 1966, Campbell married the former Linda Price, a public school Teacher who was a native of Colorado. The couple have two married children, Colin (Karen) Campbell and Shanan (John) Wells. They have four grandchildren. The Campbells still reside in Colorado.

In the book Ben Nighthorse Campbell: An American Warrior, by Herman Viola, Campbell tells of learning to make jewelry from his father and flattening silver dollars on train tracks for the materials. He also used techniques learned from sword makers in Japan and other non-traditional techniques to win over 200 national and international awards for jewelry design under the name, "Ben Nighthorse" and was included in a feature article in the late 1970s in 'Arizona Highways' magazine about Native artists experimenting in the 'new look' of Indian jewelry. Campbell has works on display with the Art of the Olympians organization.

In the years after returning from the Olympic Games, Campbell worked as a deputy sheriff in Sacramento County, California, coached the U.S. National Judo Team, operated his own dojo in Sacramento, and taught high school (physical education and art classes). He and his wife also raised quarterhorses, including a Supreme Champion and AQHA Champion, "Sailors Night". They bought a ranch near Ignacio, Colorado on the Southern Ute reservation in 1978.

Campbell was elected to the Colorado State Legislature as a Democrat in November 1982, where he served two terms. He was voted one of the 10 Best Legislators by his colleagues in a 1986 Denver Post – News Center 4 survey. Campbell was elected in 1986 to the US House of Representatives, defeating incumbent Congressman Mike Strang; he was re-elected twice to this seat. In 1989, he authored the bill HR 2668 to establish the National Museum of the American Indian, which became PL 101-185.

The early 1990s marked a turning point in Campbell's political career. In 1992, following the announced retirement of Senator Tim Wirth, Campbell won a three-way Democratic primary with former three-term Governor Richard Lamm and Boulder County Commissioner Josie Heath, who had been the party's nominee in 1990. During the primary campaign, Lamm supporters accused Heath of "spoiling" the election by splitting the vote of the party's left wing. Heath's campaign pointed out that it was Campbell who should not have been running because his voting record in Congress had been much more like that of a Republican. Campbell won the primary with 45% of the vote and then defeated Republican State Senator Terry Considine in the general election. As a Democrat, Campbell was the first Native American elected to serve in the United States Senate.

In March 1995, after two years in office, Senator Campbell switched parties from Democratic to Republican in the wake of publicized disputes he had with the Colorado Democratic Party. The Senator said that the final straw for him was the Senate's defeat of the balanced-budget amendment, which he has championed since coming to Washington as a congressman in 1987. Others attributed the switch to personal hostility within the Democratic Party in Colorado.

In 1998, Campbell won re-election to the Senate by what was then the largest margin in Colorado history for a statewide race. After winning re-election, Campbell identified as a moderate Republican saying that ''[his re-election] shows the moderate voices within the Republican Party are dominating.'' In the 106th Congress, he passed more public laws than any individual member of Congress. During his tenure, Campbell also became the first American Indian to chair the Senate Indian Affairs Committee. He retired from office in January 2005.

The Senate ethics committee investigated accusations that his former chief of staff inflated bonuses to an aide in 2002 so he could return the money to the chief of staff. In subsequent interviews, the chief of staff and aide both asserted that Campbell had approved of the deal.

Linda Campbell was the sponsor of USS Mesa Verde (LPD 19) on January 15, 2005.

Completed in 2011, Lake Nighthorse, a 120,000-acre-foot reservoir in southwestern Colorado, is named in his honor.

After his retirement, Campbell was a senior policy advisor at the firm of Holland and Knight, LLP in Washington, DC. In July 2012, he left that firm to found Ben Nighthorse Consultants, a new lobbying firm. He also continues to design and craft his Ben Nighthorse line of American Indian jewelry.