Born in Bloomington, Indiana, on November 22, 1899, Hoagland Howard "Hoagy" Carmichael was the first child and only son of Howard Clyde and Lida Mary (Robison) Carmichael. His parents named him after a circus troupe called the "Hoaglands" that had stayed at the Carmichael house during his mother's pregnancy. Howard worked as a horse-drawn taxi driver and later as an electrician, while Lida, a versatile Pianist, played accompaniment at movie theaters for silent movies and at private parties to earn extra income. Hoagy had two younger sisters, Georgia and Joanne. Because of Howard's unstable job history, the family moved frequently. Hoagy spent most of his early years in Bloomington and in Indianapolis, Indiana. In 1910, the Carmichaels were living in Missoula, Montana.

The Carmichael family moved to Indianapolis in 1916, but Hoagy returned to Bloomington in 1919 to complete high school. The piano was the focus of Carmichael's after-school life. For inspiration he would Listen to ragtime Pianists Hank Wells and Hube Hanna. At 18, the small, wiry, and pale Carmichael helped supplement his family’s meager income by working manual jobs in construction, at a bicycle-chain factory, and in a slaughterhouse. The bleak time was partly relieved by four-handed piano duets with his mother and by his friendship with DuValle, who taught him piano-jazz improvisation. Carmichael earned his first money ($5) as a musician playing at a fraternity dance in 1918, marking the beginning of his musical career.

The death of Carmichael's three-year-old sister in 1918 affected him deeply. He later wrote "My sister Joanne—the victim of poverty. We couldn’t afford a good Doctor or good attention, and that’s when I vowed I would never be broke again in my lifetime." Joanne may have died of influenza, which swept the world that year.

Carmichael composed several hundred songs, including fifty that achieved hit-record status during his long career. In his early days as a Songwriter in Indiana (1924–1929), Carmichael wrote and performed in the "hot" jazz improvisational style popular with jazz dance bands. While Carmichael was living in New York City (1929–1936), he wrote songs that were intended to stand alone, independent of any other production, such as a theatrical performance or a motion picture. His songs from this period continued to include jazz influences. During his later years in California (1936–1981), Carmichael's songs were predominately instrumentals. Nearly four dozen were written expressly for, or were incorporated into, motion pictures.

Carmichael made hundreds of recordings between 1925 and his death in 1981. He also appeared on radio and television and in motion pictures and live performances, where he demonstrated his versatility. Because Carmichael lacked the vocal strength to sing without amplification on stage, as well as the unusual tone of his voice, which he described as "flatsy through the nose, " he took advantage of new technologies, especially the electrical microphone, sound amplification, and advances in recording. As a singer-pianist, Carmichael was adept at selling his songs to lyricists, music publishers, film producers, and promoting them to the public via microphones on stage and in mass media.

After graduating from IU's law school in 1926, Carmichael moved to Florida, where he worked as a law clerk in a West Palm Beach legal firm, but he returned to Indiana in 1927 after failing the Florida bar exam. He joined an Indianapolis law firm (Bingham, Mendenhall and Bingham) and passed the Indiana bar, but devoted most of his energies to music. Carmichael had discovered his method of songwriting, which he described later: "You don't write melodies, you find them…If you find the beginning of a good song, and if your fingers do not stray, the melody should come out of hiding in a short time."

On October 31, 1927, Carmichael recorded "Star Dust," one of his most famous songs, at the Gennett Records studio in Richmond, Indiana, playing the piano solo himself. Carmichael recruited Frank Trumbauer and Bix Beiderbecke, along with members of the Paul Whiteman Orchestra that included the Dorsey brothers, to play at the late October recording session with him; it is not known which of the orchestra's Musicians were at the October 31 session when "Star Dust" was initially recorded. New York's Mills Music published the song as an upbeat piano solo in January 1929 and renamed it "Stardust." (Mills Music republished the song with the addition of Mitchell Parish's lyrics in May 1929.) "Stardust" attracted little attention until 1930, when Isham Jones and his orchestra recorded it as a sentimental ballad with a slower tempo, the re-timing often credited to the band's arranger, Victor Young. It became a hit song, the first of many for Carmichael. Its idiosyncratic melody in medium tempo–a song about a song–later became an American standard, recorded by hundreds of artists, including Artie Shaw, Nat King Cole, Ella Fitzgerald, Frank Sinatra, Willie Nelson, and Wynton Marsalis.

Carmichael received more recognition after Paul Whiteman and his orchestra recorded "Washboard Blues" on Victor Records in Chicago in November 1927, with Carmichael singing and playing the piano. Carmichael's "March of the Hoodlums" and Sheldon Brooks's "Walkin' the Dog" were produced from Carmichael's last recording session at the Gennett Records studio on May 2, 1928, with a band he had hand-selected. Despite his growing prominence, at this stage Carmichael was held back by his inability to sightread and properly notate his musical compositions, although he was innovative for the time. With coaching, he became more proficient at arranging his own music.

After the October 1929 stock market crash, Carmichael's hard-earned savings declined substantially. Fortunately, Louis Armstrong had recorded "Rockin' Chair" at Okeh studios in 1929, giving Carmichael a badly needed financial and career boost. The song became one of Carmichael's jazz standards. Carmichael composed and recorded "Georgia on My Mind" (lyrics by Stuart Gorrell) in 1930. The song became another jazz staple, as well as a pop standard, especially after World War II. Carmichael also arranged and recorded "Up a Lazy River" in 1930, a tune by Sidney Arodin. Although Carmichael and the band he assembled had first recorded "Stardust" as an instrumental in 1927, Bing Crosby recorded the tune with Mitchell Parish's lyrics in 1931.

Carmichael is considered to be among the most successful of the Tin Pan Alley songwriters of the 1930s, and was among the first singer-songwriters in the age of mass media to exploit new communication technologies, such as television and the use of electronic microphones and sound recordings. American Composer and author Alec Wilder described Carmichael as the "most talented, inventive, sophisticated and jazz-oriented of all the great craftsmen" of pop songs in the first half of the 20th century. Carmichael was an industry trailblazer, who recorded varied interpretations of his own songs and provided material for many other Musicians to interpret. His creative work includes several hundred compositions, some of them enduring classics, as well as numerous sound recordings and appearances on radio and television and in motion pictures.

Carmichael joined ASCAP in 1931. The following year he began working as a Songwriter for Ralph Peer's Southern Music Company, the first music firm to occupy the new Brill Building, which became a famous New York songwriting mecca. The Great Depression rapidly put an end to the jazz scene of the Roaring Twenties. People were no longer attending clubs or buying music, forcing many Musicians out of work. Carmichael was fortunate to retain his low-paying but stable job as a Songwriter with Southern Music. Beiderbecke's early death in 1931 also darkened Carmichael's mood. Of that time, he wrote later: "I was tiring of jazz and I could see that other Musicians were tiring as well. The boys were losing their enthusiasm for the hot stuff…. No more hot licks, no more thrills."

Carmichael's eulogy for "hot" jazz, however, was premature. Big-band swing was just around the corner, and jazz soon turned in another direction with new bandleaders, such as the Dorseys and Benny Goodman, and new Singers, such as Bing Crosby, leading the way. Carmichael's output followed the changing trend. In 1933 he began a long-lasting collaboration with lyricist Johnny Mercer, newly arrived in New York, on "Lazybones", which became a hit. Southern Music published the sheet music in 1933; more than 350,000 copies were sold in three months. Carmichael collaborated with Mercer on nearly three dozen songs, including "Thanksgiving," "Moon Country," and the 1951 Academy Award-winner for best song, "In the Cool, Cool, Cool, of the Evening." Carmichael's financial condition improved dramatically when royalties started to pour in, affording him a comfortable apartment and dapper clothes. His social life was also on the upswing, finding him hobnobbing with George Gershwin, Fred Astaire, Duke Ellington, and other music giants in the New York entertainment scene.

"Little Old Lady," included in The Show Is On (1936), was Carmichael's first song to appear in a Broadway musical and became a hit, but Carmichael's score for the Broadway production Walk With Music, which he did with Mercer, was unsuccessful. The musical opened in 1940 and ran only three weeks, producing no hit songs. Carmichael never attempted another musical, resuming his career as a singer-songwriter and character actor in Hollywood.

Carmichael also continued to write individual songs. His song "Chimes of Indiana" was presented to Indiana University, Carmichael's alma mater, in 1937 as a gift from the class of 1935. In 1938 Carmichael collaborated with Paramount lyricist Frank Loesser on "Heart and Soul," "Two Sleepy People," and "Small Fry." "Heart and Soul" was included in Paramount's motion picture A Song Is Born (1938), performed by Larry Clinton and his orchestra. (After 1950 a simpler version became a popular piano duet among American children.) Dick Powell premiered Carmichael's "I Get Along Without You Very Well (Except Sometimes)" in a national radio broadcast in 1938.

The growing Carmichael family, which included Hoagy, Ruth, and their sons, Hoagy Bix (born in 1938) and Randy Bob (born in 1940), moved into the former mansion of chewing-gum heir william P. Wrigley, Jr. in Los Angeles in 1942, when the United States entered World War II after the attack on Pearl Harbor. Carmichael, a Republican, had voted for Wendell Willkie for U.S. President in 1940, and was often aghast at his Hollywood friends' left-leaning political views. His contribution to the war effort was similar to other patriotic efforts by Irving Berlin ("This Is the Army, Mr. Jones"), Johnny Mercer ("G.I. Jive"), and Frank Loesser ("Praise the Lord and Pass the Ammunition"). Carmichael's wartime songs (most with lyrics by Paul Francis Webster) included "My Christmas Song for You," "Don't Forget to Say 'No' Baby," "Billy-a-Dick," "The Army of Hippocrates," "Cranky Old Yank," "Eager Beaver," "No More Toujours l'Amour," "Morning Glory," and the never completed "Hitler Blues." He regularly performed for USO shows.

The Johnny Appleseed Suite, Carmichael's second classical work for orchestra, suffered the same ill fate as his earlier attempt, Brown County Autumn. The suite received little notice and only limited success, but Carmichael remained financially secure due to the royalties from his past hits. During the 1940s and 1950s Carmichael also wrote more than a dozen songs for children, including "The Whale Song," "Merry-Go-Round," and "Rocket Ship".

Carmichael's 1942 song "I'm a Cranky Old Yank" was listed in the 1967 edition of the Guinness Book of Records under the title "I'm a Cranky Old Yank in a Clanky Old Tank on the Streets of Yokohama with My Honolulu Mama Doin' Those Beat-o, Beat-o Flat-On-My-Seat-o, Hirohito Blues" as the longest song title. Carmichael admitted that the longer title was a joke; it was intended to end with the word "Yank."

Carmichael appeared as an actor in 14 motion pictures, performing at least one of his songs in each. He described his on-screen persona as the "hound-dog-faced old musical Philosopher noodling on the honky-tonk piano, saying to a tart with a heart of gold: 'He'll be back, honey. He's all man.'" In 1943 Carmichael played Cricket in the screen adaptation of Ernest Hemingway's To Have and Have Not, opposite Humphrey Bogart and Lauren Bacall. He sang "Hong Kong Blues" and "The Rhumba Jumps", and played piano as Bacall sang "How Little We Know". In the multi-Academy Award-winning film The Best Years of Our Lives (1946) with Myrna Loy and Fredric March, Carmichael's character teaches a disabled veteran with metal prostheses to play "Chopsticks", and also performs "Lazy River". Carmichael played Hi Linnett in Canyon Passage (1946), a Universal Pictures western that costarred Dana Andrews, Susan Hayward, and Brian Donlevy. He also composed several songs for the film, including "Ole Buttermilk Sky," an Academy Award nominee. In addition, Carmichael contributed songs to the Paramount Pictures release of Max Fleischer's animated film Mister Bug Goes to Town in 1941 (later reissued as Hoppity Goes To Town).

Between 1944 and 1948, Carmichael became a well-known radio personality and hosted three musical-variety programs. In 1944–45, the 30-minute Tonight at Hoagy's aired on Mutual radio on Sunday nights at 8:30 p.m. (Pacific time), sponsored by Safeway supermarkets. Produced by Walter Snow, the show featured Carmichael as host and vocalist. Musicians included Pee Wee Hunt and Joe Venuti. Fans were rather blunt about Carmichael's singing, providing comments such as "you cannot sing for sour owl" and "your singing is so delightfully awful that it is really funny". NBC carried the 30-minute Something New at 6 p.m. Pacific time on Mondays in 1945–46. All the Musicians in the show's band, called the "Teenagers", were between the ages of 16 and 19. Carol Stewart and Gale Robbins were the vocalists and comedy was supplied by Pinky Lee and the team of Bob Sweeney and Hal March, later of quiz-show fame. CBS broadcast The Hoagy Carmichael Show from October 26, 1946, until June 26, 1948. Luden's Cough Drops sponsored the 15-minute program until June 1947.

During the 1950s the public's musical preferences shifted toward rhythm and blues and rock and roll, ending the careers of most older artists. Carmichael's songwriting career also slowed down, but he continued to perform. He appeared in the motion picture Young Man with a Horn (1950), based on friend Bix Beiderbecke's life, with Bacall and Kirk Douglas. "In the Cool, Cool, Cool of the Evening", with lyrics by Johnny Mercer, was featured in the 1951 film Here Comes the Groom and won Carmichael his first Academy Award for Best Original Song and Mercer his second of four Academy Awards. In 1952 Carmichael played his composition "My Resistance Is Low" in the Howard Hughes film The Las Vegas Story. The lyrics were by Harold Adamson. Although the song did not catch fire in the United States, it was a hit in Great Britain. Carmichael also composed seven songs for Gentlemen Prefer Blondes (1953), but only two made the final cut: "Ain't There Anyone Here for Love", sung by Jane Russell, and "When Love Goes Wrong (Nothing Goes Right)". Harold Campbell Adamson wrote the lyrics for both songs.

Carmichael and lyricist Johnny Mercer received an Academy Award for Best Music, Song, for "In the Cool, Cool, Cool of the Evening," which was featured in the 1951 film Here Comes the Groom. "Ole Buttermilk Sky" received an Oscar nomination for Best Music, Song, of 1946, but it was not the winner. Carmichael's recording of "Star Dust" in 1927 at the Gennett Records studio that includes him playing the piano solo was inducted into the Grammy Hall of Fame. In addition, it was selected for inclusion in the National Recording Registry at the Library of Congress in 2004.

As his songwriting career started to fade, Carmichael's marriage also dissolved. He and his wife Ruth divorced in 1955.

Carmichael was inducted into the Hollywood Walk of Fame on February 8, 1960. (His sidewalk star tribute is located at 1720 Vine Street in Hollywood.) In 1971 Carmichael was inducted into the Songwriters Hall of Fame as one of its initial ten inductees. In 2007 Carmichael was inducted into the Gennett Records Walk of Fame in Richmond, Indiana. Bronze and ceramic medallions, one for each of the inductees, have been placed near the location of the Starr Piano Company’s Manufacturing complex, the site of the Gennett Records studio where he first recorded "Star Dust" in 1927. On July 5, 2008, a mural with his portrait was dedicated to him on the south wall of the Readmore building in Richmond, Indiana.

In the early 1950s variety shows were particularly popular on television. Carmichael's most notable appearance was as the host of Saturday Night Review in June 1953, a summer replacement series for Your Show of Shows, but he found the pressure too intense and did not return the following summer. Around 1955 Carmichael reprised Dooley Wilson's role of Sam the piano player in a short-lived television adaptation of Casablanca on Warner Brothers Presents. Carmichael guest-starred with Keenan Wynn, Anthony George, and Olive Carey in "Death in the Snow," a 1956 episode of the NBC anthology series The Joseph Cotten Show. He was also a regular cast member, playing the character role of Jonesy the ranch hand in the first season of NBC's western series Laramie (1959–63) with John Smith and Robert Fuller. Carmichael also costarred in The Helen Morgan Story on CBS's Playhouse 90 (1957), and provided the voice for a Stone Age parody of himself, "Stoney Carmichael", in an episode of ABC's The Flintstones, which aired in September 1961. On June 15, 1961, he appeared in one of the final episodes of The Ford Show, Starring Tennessee Ernie Ford on NBC.

Carmichael's second memoir, Sometimes I Wonder: The Story of Hoagy Carmichael, was published in 1965. By 1967 he was spending time in New York, but his new songs were unsuccessful and his musical career came to a close. Carmichael took up other interests in retirement such as golf, coin collecting, and enjoying his two homes, one on Sunset Boulevard in Los Angeles and the other in Rancho Mirage, California.

As he passed his 70th birthday, Carmichael's star continued to wane and was nearly forgotten in a world dominated by rock music. With the help and encouragement of his son, Hoagy Bix, Carmichael participated in the PBS television show Hoagy Carmichael's Music Shop that featured jazz-rock versions of his hits. He appeared on Fred Rogers's PBS show Old Friends, New Friends in 1978. With more time on his hands, Carmichael resumed painting, and after a long courtship he married Dorothy Wanda McKay, an Actress, In 1977.

On June 27, 1979, the Newport Jazz Festival honored Carmichael with a tribute concert, "The Star Dust Road: A Hoagy Carmichael Jubilee", at New York City's Carnegie Hall.

On his 80th birthday, Carmichael was reflective, observing, "I'm a bit disappointed in myself. I know I could have accomplished a hell of a lot more... I could write anything any time I wanted to. But I let other things get in the way.... I've been floating around in the breeze." He spent his final years at home in Rancho Mirage, near Palm Springs, California, where he continued to play golf and remained an avid coin collector.

Carmichael died of heart failure at the Eisenhower Medical Center in Rancho Mirage, California, on December 27, 1981, at the age of 82. His remains are buried in Rose Hill Cemetery in Bloomington, Indiana.

In 1986 Carmichael's family donated his archives, piano, and memorabilia to his alma mater, Indiana University, which established a Hoagy Carmichael Collection in its Archives of Traditional Music and the Hoagy Carmichael Room to permanently display selections from the collection.

Carmichael wrote two autobiographies that Da Capo Press combined into a single volume for a paperback, published in 1999:

Carmichael is memorialized with an Indiana state historical marker, installed in 2007 in front of the former Book Nook (one of Carmichael's favorite local hangouts) on South Indiana Avenue, near the corner of Kirkwood and Indiana Streets in Bloomington. The marker is located across the street from the heart of the Indiana University campus. In 2008 the bronze Hoagy Carmichael Landmark Sculpture by Artist Michael McAuley was installed at the northeast corner of the IU Auditorium on IU's Bloomington campus.

After Carmichael’s death in 1981, other recording artists have continued to include his songs on their albums: