Berenson was born Bernhard Valvrojenski in Butrimonys, Vilnius Governorate (now in Alytus district of Lithuania) to a Litvak family. They emigrated to Boston, Massachusetts from the Vilnius Governorate of the Russian Empire in 1875, whereupon the family name was changed to "Berenson." Berenson converted to Christianity in 1885, becoming an Episcopalian. Later, while living in Italy, he converted to Catholicism.

After graduating from Boston Latin School he attended the Boston University College of Liberal Arts as a freshman during 1883–84, but, unable to obtain instruction in Sanskrit from that institution, transferred to Harvard University for his sophomore year. He graduated from Harvard and married Mary Smith, who became a notable art Historian in her own right. Mary was the sister of Logan Pearsall Smith and of Alys Pearsall Smith, the first wife of Bertrand Russell. Mary had previously been married to barrister Frank Costelloe. Bernard Berenson was also involved in a long relationship with Belle da Costa Greene. Samuels (1987) mentions Mary's "reluctant acceptance (at times)" of this relationship.

Starting with his The Venetian Painters of the Renaissance with an Index to their Works (1894), his mix of connoisseurship and systematic approach proved immensely successful. In 1895 his Lorenzo Lotto, an Essay on Constructive Art Criticism won wide critical acclaim, notably by Heinrich Wölfflin. It was quickly followed by The Florentine Painters of the Renaissance (1896), that was lauded by william James for its innovative application of "elementary psychological categories to the interpretation of higher art".

In 1897 Berenson added another work to his series of scholarly yet handy guides publishing The Central Italian Painters of the Renaissance. After that he devoted six years of pioneering work to what is widely regarded as his deepest and most substantial book, The Drawings of the Florentine Painters, which was published in 1903.

Among US Collectors of the early 1900s, Berenson was regarded as the pre-eminent authority on Renaissance art. His verdict of authenticity increased a painting's value. While his approach remained controversial among European art historians and connoisseurs, he played a pivotal role as an advisor to several important American art Collectors, such as Isabella Stewart Gardner, who needed help in navigating the complex and treacherous market of newly fashionable Renaissance art. In this respect Berenson's influence was enormous, while his 5% commission made him a wealthy man. (According to Charles Hope, he "had a financial interest in many works...an arrangement that Berenson chose to keep private." )

In 1907 he published his The North Italian Painters of the Renaissance, where he expressed a devastating and still controversial judgement of Mannerist art, which may be related to his love for Classicism and his professed distaste for Modern Art. His early works were later integrated in his most famous book, The Italian Painters of the Renaissance (1930), which was widely translated and reprinted. He also published two volumes of journals, "Rumor and Reflection" and "Sunset and Twilight". He is also the author of Aesthetics and History and Sketch for a Self-portrait. His beautiful residence in Settignano near Florence, which has been called 'I Tatti' since at least the 17th century, was willed to Harvard at his death and became The Harvard Center for Italian Renaissance Studies, a research center offering a residential fellowship to scholars working on all areas of the Italian Renaissance. It houses his art collection and his personal library of books on art history and humanism, which Berenson regarded as his most enduring legacy. A spirited portrait of daily life at the Berenson "court" at I Tatti during the 1920s may be found in Sir Kenneth Clark's 1974 memoir, Another Part of the Wood. 'During WW2, barely tolerated by the Fascist authorities and, later on, by their German masters, Berenson remained at "I Tatti". When the frontline reached it at the end of the summer of 1944 he wrote in his diary, "Our hillside happens to lie between the principal line of German retreat along the Via Bolognese and a side road...We are at the heart of the German rearguard action, and seriously exposed.". Remarkably, under his supervision the villa remained unharmed. Also unharmed was the bulk of his collections, which had been moved to a villa at Careggi. However, Berenson's Florence apartment in the Borgo San Jacopo was destroyed with some of its precious contents during the German retreat from Florence. Another memoir with personal reminiscences and photographs of Berenson's life in Italy before and after the war is Kinta Beevor's "A Tuscan Childhood" [New York: Vintage Books, 2000; c.1993].

Through a secret agreement in 1912, Berenson enjoyed a close relationship with Joseph Duveen, the period's most influential art dealer, who often relied heavily on Berenson's opinion to complete sales of works to prominent Collectors who lacked knowledge of the field. Berenson was quiet and deliberating by nature, which sometimes caused friction between him and the boisterous Duveen. Their relationship ended on bad terms in 1937 after a dispute over a painting, the Allendale Nativity (a.k.a. the Adoration of the Shepherds now at the National Gallery in Washington), intended for the collection of Samuel H. Kress. Duveen was selling it as a Giorgione, but Berenson believed it to be an early Titian. The painting is now widely considered to be a Giorgione. Beside assisting Duveen, Berenson also consulted for other important art dealerships, such as London's Colnaghi and, after his breakup with Duveen, New York's Wildenstein.

In 1923, Berenson was called to give expert witness in a famous case brought by Andrée Hahn against Duveen. In 1920 Hahn wanted to sell a painting that she believed to be a version of Leonardo's La belle ferronnière and whose authorship is still debated. Duveen publicly rejected Hahn's Leonardo attribution of the painting, which he had never seen. Consequently, Hahn sued him. In 1923 Hahn's painting was brought to Paris to be compared with the Louvre version. Duveen mustered Berenson's and other experts' support for his opinion, dismissing Hahn's painting as a copy. At the trial in New York in 1929, where the expert witnesses did not appear, the jury was not convinced by Berenson's Paris testimony, in part because, while under cross-examination there, he had been unable to recall the medium on which the picture was painted. It was also revealed that Berenson, as well as other experts who had testified in Paris, such as Roger Fry and Sir Charles Holmes, had previously provided paid expertise to Duveen. While Duveen, after a split verdict, ended up settling out of court with Hahn, the whole story damaged Berenson's reputation. He was elected a Fellow of the American Academy of Arts and Sciences in 1958.

Nine years worth of correspondence (1950-1959) between Berenson and San Diego-based Norah Bisgood Woodward is held by Special Collections and Archives at the UC San Diego Library.

Recent scholarship has established that Berenson's secret agreements with Duveen resulted in substantial profits to himself, as much as 25% of the proceeds, making him a wealthy man. This clear conflict of interest has thrown into doubt many of his authentications for Duveen and a number of these have been shown, through careful examination, to have become more optimistic, therefore considerably more valuable, once he was working for Duveen. No systematic comparison has, as yet, been done, but a partial study of 70 works points to this possibility. (Meryle Secrest, "Being Bernard Berenson", 1979, Appendix, p. 399) The issue is still controversial.

Marisa Berenson, an Actress, is a distant cousin of Berenson's through Louis Kossivitsky. Louis was a nephew of Berenson's father, Albert Valvrojenski, the orphaned son of his sister. On arrival in the U.S. both Koussivitsky and Valvrojenski took the name of Berenson. (Meryle Secrest, Being Bernard Berenson, p. 34) Her sister, Berry Berenson, was an actress/photographer, and the wife of actor Anthony Perkins. Berry died in the September 11, 2001 attacks in New York City.

2006 saw the publication of the noted British Historian Hugh Trevor-Roper's letters to Berenson in the period 1947–60, in a book entitled Letters from Oxford: Hugh Trevor-Roper to Bernard Berenson, edited by Richard Davenport-Hines, published by Weidenfeld & Nicolson.

In 2015, Yale University Press published Kenneth Clark's correspondence with Berenson in the book My Dear BB: The Letters of Bernard Berenson and Kenneth Clark, 1925-1959, edited and annotated by Robert Cumming.