Elliot was born in Portland, Oregon, to Fred and Clara Elliot. Fred was of Scottish heritage; his grandparents were the first of his family to settle in North America. Clara's parents moved near the turn of the 20th century from Switzerland to eastern Washington, where they operated a large ranch. They met in Portland, where Clara was studying to be a chiropractor and Fred, having devoted himself to Christian ministry, was working as a traveling preacher with the Plymouth Brethren church. Robert, their first child, was born in 1921 while they were living in Seattle, and he was followed by Herbert, Jim, and Jane, all three of whom were born after the family moved to Portland. Elliot's parents had firm Christian beliefs, and they raised their children accordingly, taking them to church and reading the Bible regularly. Elliot professed faith in Jesus at the age of six and grew up in a home where obedience and honesty were enforced. The Elliot parents encouraged their children to be adventurous, and encouraged them to "live for Christ".

In 1941, Elliot entered Benson Polytechnic High School, studying architectural drawing. There he participated in numerous activities, including the school newspaper, the wrestling team, school plays, and the public-speaking club. His acting ability led some of the teachers in the school to suggest that he pursue acting as a career, and his oratorical skills were similarly lauded—after preparing and delivering a speech in honor of President Franklin D. Roosevelt hours after his death, a faculty member praised it.

His journal entry for October 28, 1949, expresses his belief that work dedicated to Jesus was more important than his life (see Luke 9:24. "For whosoever will save his life shall lose it: but whosoever will lose his life for my sake, the same shall save it.") He wrote, "he is no fool who gives what he cannot keep to gain that which he cannot lose." He follows the journal entry with a citation from Luke 16:9 ("that when it shall fail, they may receive you into everlasting habitations".) It is close to a saying of the English nonconformist preacher Philip Henry (1631–1696) who said "He is no fool who parts with that which he cannot keep, when he is sure to be recompensed with that which he cannot lose".

After the completion of his linguistic studies, Elliot applied for a passport and began to make plans with his friend Bill Cathers to leave for Ecuador. However, two months later Cathers informed him that he planned to marry, making it impossible for him to accompany Elliot as they had planned. Instead, Elliot spent the winter and spring of 1951 working with his friend Ed McCully in Chester, Illinois, running a radio program, preaching in prisons, holding evangelistic rallies, and teaching Sunday school.

Elliot and Fleming arrived in Ecuador on February 21, 1952, with the purpose of evangelizing Ecuador's Quechua Indians. They first stayed in Quito, and then moved to the jungle. They took up residence at the Shandia mission station. On October 8, 1953, he married fellow Wheaton alumna and missionary Elisabeth Howard. The wedding was a simple civil ceremony held in Quito. Ed and Marilou McCully were the witnesses. The couple then took a brief honeymoon to Panama and Costa Rica, then returned to Ecuador. Their only child, Valerie, was born February 27, 1955. While working with Quechua Indians, Elliot began preparing to reach the Huaorani.

Elliot and four other missionaries – Ed McCully, Roger Youderian, Pete Fleming, and their pilot, Nate Saint – made contact from their Piper PA-14 airplane with the Huaorani using a loudspeaker and a basket to pass down gifts. After several months, the men decided to build a base a short distance from the Indian village, along the Curaray River. There they were approached one time by a small group of Huaorani and even gave an airplane ride to one curious Huaorani whom they called "George" (his real name was Naenkiwi). Encouraged by these friendly encounters, they began plans to visit the Huaorani, without knowing that Naenkiwi had lied to the others about the missionaries' intentions. Their plans were preempted by the arrival of a larger group of about 10 Huaorani warriors, who killed Elliot and his four companions on January 8, 1956. Jim Elliot was the first of the five missionaries killed when he and Peter Fleming were greeting two of those attackers that showed themselves pretending they were interested in taking plane rides with them. Elliot's body was found downstream, along with those of the other men, except that of Ed McCully which was found even farther downstream.

Life magazine published a ten-page article on Elliot's and his friends' mission and deaths. After his death, his wife Elisabeth Elliot and other missionaries began working among the Huaorani, where they continued evangelistic work. She later published two books, Shadow of the Almighty: The Life and Testament of Jim Elliot and Through Gates of Splendor, which describe the life and death of her husband. In 1991, the Jim Elliot Christian School was created in Denver, Colorado. In 1997, the Jim Elliot Christian High School was founded in Lodi, California.

In 2002, a documentary based on the story was released, entitled Beyond the Gates of Splendor. In 2003, a musical based on the story of Jim and Elisabeth Elliot, entitled Love Above All, was staged at the Victoria Concert Hall in Singapore by Mount Carmel Bible-Presbyterian Church. This musical was staged a second time in 2007 at the NUS University Cultural Centre. In 2006, a theatrical movie was released, entitled End of the Spear, based on the story of the pilot, Nate Saint, and the return trip of Saint's son attempting to reach the natives of Ecuador.

(Garfie) While at Camp Wycliffe, Elliot practiced the skills necessary for writing down a language for the first time by working with a former missionary to the Quechua people. The missionary told him of the Huaorani – also called the "Auca", the Quichua word for "savage" – a group of Ecuadorian indigenous people considered violent and dangerous to outsiders. Elliot remained unsure about whether to go to Ecuador or India until July. His parents and friends wondered if he might instead be more effective in youth ministry in the United States, but considering the home church "well-fed", he felt that international missions should take precedence.