Lully was born on November 28, 1632, in Florence, Grand Duchy of Tuscany, to a family of millers. His general education and his musical training during his youth in Florence remain uncertain, but his adult handwriting suggests that he manipulated a quill pen with ease. He used to say that a Franciscan friar gave him his first music lessons and taught him guitar. He also learned to play the violin. In 1646, dressed as Harlequin during Mardi Gras and amusing bystanders with his clowning and his violin, the boy attracted the attention of Roger de Lorraine, chevalier de Guise, son of Charles, Duke of Guise, who was returning to France and was looking for someone to converse in Italian with his niece, Mademoiselle de Montpensier (la Grande Mademoiselle). Guise took the boy to Paris, where the fourteen-year-old entered Mademoiselle's service; from 1647 to 1652 he served as her "chamber boy" (garçon de chambre). He probably honed his musical skills by working with Mademoiselle's household Musicians and with composers Nicolas Métru, François Roberday and Nicolas Gigault. The teenager's talents as a Guitarist, Violinist, and Dancer quickly won him the nicknames "Baptiste", and "le grand baladin" (great street-artist).

Lully is credited with the invention in the 1650s of the French overture, a form used extensively in the Baroque and Classical eras, especially by Johann Sebastian Bach and George Frideric Handel.

When Mademoiselle was exiled to the provinces in 1652 after the rebellion known as the Fronde, Lully "begged his leave ... because he did not want to live in the country." The Princess granted his request.

By February 1653, Lully had attracted the attention of young Louis XIV, dancing with him in the Ballet royal de la nuit. By March 16, 1653, Lully had been made royal Composer for instrumental music. His vocal and instrumental music for court ballets gradually made him indispensable. In 1660 and 1662 he collaborated on court performances of Francesco Cavalli's Xerse and Ercole amante. When Louis XIV took over the reins of government in 1661, he named Lully superintendent of the royal music and music master of the royal family. In December 1661, the Florentine was granted letters of naturalization. Thus, when he married Madeleine Lambert (1643–1720), the daughter of the renowned singer and Composer Michel Lambert in 1662, Giovanni Battista Lulli declared himself to be "Jean-Baptiste Lully, escuyer [squire], son of Laurent de Lully, gentilhomme Florentin [Florentine gentleman]". The latter assertion was an untruth.

The first menuets appear in the Ballet de la Raillerie (1659) and the Ballet de l'Impatience (1661). In Lully's ballets one can also see the emergence of concert music, for Example, pieces for voice and instruments that could be excerpted and performed alone and that prefigure his operatic airs: "Bois, ruisseau, aimable verdure" from the Ballet des saisons (1661), the lament "Rochers, vous êtes sourds" and Orpheus's sarabande "Dieu des Enfers", from the Ballet de la naissance de Vénus (1665).

Lully's grand motets were written for the royal chapel, usually for vespers or for the king's daily low mass. Lully did not invent the genre, he built upon it. Grand motets often were psalm settings, but for a time during the 1660s Lully used texts written by Pierre Perrin, a neo-Latin poet. Lully's petit motets were probably composed for the nuns at the convent of the Assumption, rue Saint-Honoré.

Intermèdes became part of a new genre, the comédie-ballet, in 1661, when Molière described them as "ornaments which have been mixed with the comedy" in his preface to Les Fâcheux (fr). "Also, to avoid breaking the thread of the piece by these interludes, it was deemed advisable to weave the ballet in the best manner one could into the subject, and make but one thing of it and the play." The music for the premiere of Les Fâcheux was composed by Pierre Beauchamp, but Lully later provided a sung courante for Act I, scene 3. With Le Mariage forcé (fr) and La Princesse d'Élide (fr) (1664), intermèdes by Lully began to appear regularly in Molière's plays: for those performances there were six intermèdes, two at the beginning and two at the end, and one between each of the three acts. Lully's intermèdes reached their apogee in 1670–1671, with the elaborate incidental music he composed for Le Bourgeois gentilhomme and Psyché. After his break with Molière, Lully turned to opera; but he collaborated with Jean Racine for a fete at Sceaux in 1685, and with Campistron for an entertainment at Anet in 1686.

In 1672 Lully broke with Molière, who turned to Marc-Antoine Charpentier. Having acquired Pierre Perrin's opera privilege, Lully became the Director of the Académie Royale de Musique, that is, the royal opera, which performed in the Palais-Royal. Between 1673 and 1687, he produced a new opera almost yearly and fiercely protected his monopoly over that new genre.

After Queen Marie-Thérèse's death in 1683 and the king's secret marriage to Mme de Maintenon, devotion came to the fore at court. The king's enthusiasm for opera dissipated; he was revolted by Lully's dissolute life and homosexual encounters. In 1686, to show his displeasure, Louis XIV made a point of not inviting Lully to perform Armide at Versailles. Lully died from gangrene, having struck his foot with his long conducting staff during a performance of his Te Deum to celebrate Louis XIV's recovery from surgery. He refused to have his leg amputated so he could still dance. This resulted in gangrene propagating through his body and ultimately infecting the greater part of his brain, causing his death. He died in Paris and was buried in the church of Notre-Dame-des-Victoires, where his tomb with its marble bust can still be seen. All three of his sons (Louis Lully, Jean-Baptiste Lully fils, and Jean-Louis Lully) had musical careers as successive surintendants of the King's Music.