George Marshall was the youngest of three siblings. His older brother Stuart Bradford Marshall (1875–1956) was a graduate of the Virginia Military Institute, and became a manager and executive in several metal production corporations, including the American Manganese Manufacturing Company. He later worked as a metallurgist and consulting Engineer specializing in the production and operation of blast furnaces, coke ovens, and foundries. George and Stuart Marshall were long estranged; according to relatives, George Marshall's first wife, Lily, had dated other VMI cadets before him, and rejected their proposals, to include Stuart Marshall. When Stuart found out George was engaged to Lily, Stuart made unkind remarks about her, and George "cut him off my list". His sister, Marie (1876–1962) was the wife of Dr. John J. Singer, an Army physician who died in 1934.

Following graduation from VMI in 1901, Marshall sat for a competitive examination for a commission in the U.S. Army. While awaiting the results he took the position of Commandant of Students at the Danville Military Institute in Danville, Virginia. Marshall passed the exam and was commissioned a second lieutenant in February, 1902.

Marshall married Elizabeth Carter Coles, or "Lily", at her mother's home on Letcher Avenue in Lexington, Virginia, on 11 February 1902. She died on 15 September 1927 after thyroid surgery that put significant strain on her weak heart. They did not have children.

In 1913 General Johnson Hagood, then a lieutenant colonel, completed a written evaluation of Marshall's performance in which he called Marshall a military genius. Responding to the question of whether he would want his subordinate Marshall to serve under him again, Hagood wrote "Yes, but I would prefer to serve under his command." (Emphasis added.)

After another tour of duty in the Philippines, Marshall returned to the United States in 1916 to serve as aide-de-camp to the commander of the Western Department, former Army chief of staff Major General J. Franklin Bell, at the Presidio in San Francisco. After the United States declared war on Germany in April 1917, Marshall relocated with Bell to Governors Island, New York when Bell was reassigned as commander of the Department of the East. Shortly afterwards, Marshall was assigned to help oversee the mobilization of the 1st Division for Service in France.

During the Great War, he had roles as a planner of both training and operations. In the summer of 1917, he as assigned as assistant chief of staff for operations on the staff of the 1st Division. After overseeing the division's mobilization and organization in Texas, he departed for France with the division staff in mid-1917. On the long ocean voyage, his roommate was the division's assistant chief of staff for training, Lesley J. McNair; the two formed a personal and professional bond that they maintained for the rest of their careers.

In mid-1918, he was posted to the headquarters of the American Expeditionary Force, where he worked closely with his mentor, General John Joseph Pershing, and was a key planner of American operations. He was instrumental in the planning and coordination of the Meuse-Argonne Offensive, which contributed to the defeat of the German Army on the Western Front in 1918. Marshall held the permanent rank of captain and the temporary rank of colonel; he was recommended for promotion to temporary brigadier general in October 1918, but the Armistice occurred before the recommendation was acted on. After the war, Marshall reverted to his permanent rank.

In 1919, he became an aide-de-camp to General John J. Pershing. Between 1920 and 1924, while Pershing was Army Chief of Staff, Marshall worked in a number of positions in the army, focusing on training and teaching modern, mechanized warfare. Between World Wars I and II, he was a key planner and Writer in the War Department, commanded the 15th Infantry Regiment for three years in China, and taught at the Army War College. In 1927, as a lieutenant colonel, he was appointed assistant commandant of the Infantry School at Fort Benning, where he initiated major changes to modernize command and staff processes, which proved to be of major benefit during World War II. Marshall placed Edwin F. Harding in charge of the Infantry School's publications, and Harding became Editor of Infantry in Battle, a book that codified the lessons of World War I. Infantry in Battle is still used as an officer's training manual in the Infantry Officer's Course and was the training manual for most of the infantry officers and Leaders of World War II.

After the war, Marshall was assigned as an aide-de-camp to John J. Pershing, who was then serving as the Army's Chief of Staff. He later served on the Army staff, commanded the 15th Infantry Regiment in China, and was an instructor at the Army War College. In 1927, he became assistant commandant of the Army's Infantry School, where he modernized command and staff processes, which proved to be of major benefit during World War II. In 1932 and 1933 he commanded the 8th Infantry Regiment and Fort Screven, Georgia. Marshall commanded 5th Brigade, 3rd Infantry Division and Vancouver Barracks from 1936 to 1938, and received promotion to brigadier general. During this command, Marshall was also responsible for 35 Civilian Conservation Corps (CCC) camps in Oregon and southern Washington. In July 1938, Marshall was assigned to the War Plans Division on the War Department staff, and he was subsequently appointed as the Army's Deputy Chief of Staff. When Chief of Staff Malin Craig retired in 1939, Marshall became acting Chief of Staff, and then Chief of Staff. He served as Chief of Staff until the end of the war in 1945.

On 15 October 1930, Marshall married Katherine Boyce Tupper (8 October 1882 – 18 December 1978); John J. Pershing served as best man. Katherine Tupper was the mother of three children with Baltimore Lawyer Clifton Stevenson Brown, who had been murdered by a disgruntled client in 1928. The second Mrs. Marshall was a graduate of the American Academy of Dramatic Arts; she later studied at the Comédie-Française, and toured with Frank Benson's English Shakespearean Company. She authored a memoir, 1946's Together: Annals of an Army Wife. One of Marshall's stepsons, Allen Tupper Brown, was an Army lieutenant who was killed by a German sniper in Italy on May 29, 1944. Another stepson was Major Clifton Stevenson Brown Jr. (1914–1952). Step-daughter Molly Brown Winn, who was the mother of Actress Kitty Winn, was married to US Army Major James J. Winn, who had been an aide to General Marshall.

From June 1932 to June 1933 he was the commanding officer of the 8th Infantry Regiment at Fort Screven, Georgia. From July 1933 to October 1933 he was commander of Fort Moultrie, South Carolina and District I of the Civilian Conservation Corps, and he was promoted to colonel in September 1933. He was senior instructor and chief of staff for the Illinois National Guard's 33rd Division from November 1933 to August 1936.

Marshall commanded the 5th Brigade of the 3rd Infantry Division and Vancouver Barracks in Vancouver, Washington from 1936 to 1938, and was promoted to brigadier general in October 1936. In addition to obtaining a long-sought and significant troop command, traditionally viewed as an indispensable step to the pinnacle of the US Army, Marshall was also responsible for 35 Civilian Conservation Corps (CCC) camps in Oregon and southern Washington. As post commander Marshall made a concerted effort to cultivate relations with the city of Portland and to enhance the image of the US Army in the region. With the CCC, he initiated a series of measures to improve the morale of the participants and to make the experience beneficial in their later life. He started a newspaper for the CCC region that proved a vehicle to promote CCC successes, and he initiated a variety of programs that developed their skills and improved their health. Marshall's inspections of the CCC camps gave him and his wife Katherine the chance to enjoy the beauty of the American North West and made that assignment what he called "the most instructive Service I ever had, and the most interesting."

In July 1938, Marshall was assigned to the War Plans Division in Washington D.C. and subsequently reassigned as Deputy Chief of Staff. In that capacity, then-Brigadier General Marshall attended a conference at the White House at which President Roosevelt proposed a plan to provide aircraft to England in support of the war effort, lacking forethought with regard to logistical support or training. With all other attendees voicing support of the plan, Marshall was the only person to voice his disagreement. Despite the Common belief that he had ended his career, this action resulted in his being nominated by President Franklin Roosevelt to be the Army Chief of Staff. Upon the retirement of General Malin Craig on July 1, 1939, Marshall became acting chief of staff. Marshall was promoted to general and sworn in as chief of staff on September 1, 1939, the same day the German Army launched its invasion of Poland. He would hold this post until the end of the war in 1945.

Marshall was a Freemason, having been made a Mason "at sight" in 1941 by the Grand Master of the Grand Lodge of the District of Columbia.

Faced with the necessity of turning an army of former civilians into a force of over eight million Soldiers by 1942 (a fortyfold increase within three years), Marshall directed General Lesley J. McNair to focus efforts on rapidly producing large numbers of Soldiers. With the exception of airborne forces, Marshall approved McNair's concept of an abbreviated training schedule for men entering Army land forces training, particularly in regard to basic infantry skills, weapons proficiency, and combat tactics. At the time, most U.S. commanders at lower levels had little or no combat experience of any kind. Without the input of experienced British or Allied combat officers on the nature of modern warfare and enemy tactics, many resorted to formulaic training methods emphasizing static defense and orderly large-scale advances by motorized convoys over improved roads. In consequence, Army forces deploying to Africa in Operation Torch suffered serious initial reverses when encountering German armored combat units in Africa at Kasserine Pass and other major battles. Even as late as 1944, U.S. Soldiers undergoing stateside training in preparation for deployment against German forces in Europe were not being trained in combat procedures and tactics in use there.

Throughout the remainder of World War II, Marshall coordinated Allied operations in Europe and the Pacific. He was characterized as the organizer of Allied victory by Winston Churchill. Time magazine named Marshall Man of the Year for 1943. Marshall resigned his post of chief of staff in 1945, but did not retire, as regulations stipulate that Generals of the Army remain on active duty for life.

On December 16, 1944, Marshall became the first American Army general to be promoted to five-star rank, the newly created General of the Army – the American equivalent rank to field marshal. He was the second American to be promoted to a five-star rank, as william Leahy was promoted to fleet admiral the previous day.

In December 1945, President Harry Truman sent Marshall to China, to broker a coalition government between the Nationalist allies under Generalissimo Chiang Kai-shek and Communists under Mao Zedong. Marshall had no leverage over the Communists, but he threatened to withdraw American aid essential to the Nationalists. Both sides rejected his proposals and the Chinese Civil War escalated, with the Communists winning in 1949. His mission a failure, he returned to the United States in January 1947. Chiang Kai-shek and some historians later claimed that cease-fire, under pressure of Marshall, saved the Communists from defeat. As Secretary of State in 1947–48, Marshall seems to have disagreed with strong opinions in The Pentagon and State Department that Chiang's success was vital to American interests, insisting that U.S. troops not become involved.

Marshall was again named Time's Man of the Year for 1947. He received the Nobel Peace Prize for his post-war work in 1953, the only career officer in the United States Army to ever receive this honor.

As Secretary of State, Marshall strongly opposed recognizing the state of Israel. Marshall felt that if the state of Israel was declared that a war would break out in the Middle East (which it did in 1948 one day after Israel declared independence). Marshall saw recognizing the Jewish state as a political move to gain Jewish support in the upcoming election, in which Truman was expected to lose to Dewey. He told President Truman in May 1948, "If you (recognize the state of Israel) and if I were to vote in the election, I would vote against you." However, Marshall refused to vote in any election as a matter of principle.

Marshall resigned from the State Department because of ill health on January 7, 1949, and the same month became chairman of the American Battle Monuments Commission. In September 1949, Marshall was named President of the American National Red Cross.

Marshall participated in the post-Inchon landing discussion that led to authorizing Douglas MacArthur to conduct operations in North Korea. A secret "eyes only" signal from Marshall to MacArthur on September 29, 1950 declared the Truman administration's commitment: "We want you to feel unhampered strategically and tactically to proceed north of the 38th Parallel". At the same time, Marshall advised against public pronouncements which might lead to United Nations votes undermining or countermanding the initial mandate to restore the border between North and South Korea. Marshall and the Joint Chiefs of Staff were generally supportive of MacArthur because they were of the view that field commanders should be able to exercise their best judgment in accomplishing the intent of their superiors.

Marshall retired in September 1951 to his home, Dodona Manor, in Leesburg, Virginia to tend to his gardens and continue his passion for horseback riding. He was head of the American delegation at the coronation of Queen Elizabeth II in 1953. He also served as Chairman of the American Battle Monuments Commission from 1949 to 1959.

Marshall died at Walter Reed Hospital in Washington, D.C. on October 16, 1959 at the age of 78. He is interred at Arlington National Cemetery in Arlington, Virginia in Section 7, Grave 8198. Marshall is buried with his first wife, Elizabeth Carter Coles (1875–1927); his first wife's mother, Elizabeth Pendleton Coles (1849–1929); and his second wife, Katherine Tupper Brown Marshall (1882–1978).

Following Chinese military intervention in Korea during late November, Marshall and the Joint Chiefs of Staff sought ways to aid MacArthur while avoiding all-out war with China. In the debate over what to do about China's increased involvement, Marshall opposed a cease–fire on the grounds that it would make the U.S. look weak in China's eyes, leading to demands for Future concessions. In addition, Marshall argued that the U.S. had a moral obligation to honor its commitment to South Korea. When British Prime Minister Clement Attlee suggested diplomatic overtures to China, Marshall opposed, arguing that it was impossible to negotiate with the Communist government. In addition, Marshall expressed concern that concessions to China would undermine confidence in the U.S. among its Asian allies, including Japan and the Philippines. When some in Congress favored expanding the war in Korea and confronting China, Marshall argued against a wider war in Korea, continuing instead to stress the importance of containing the Soviet Union during the Cold War battle for primacy in Europe.