John Newton was born in Wapping, London, in 1725, the son of John Newton Sr., a shipmaster in the Mediterranean Service, and Elizabeth (née Scatliff). Elizabeth was the only daughter of Simon Scatliff, an instrument maker from London (the marriage register records her maiden name as Seatcliffe). Elizabeth was brought up as a Nonconformist. She died of tuberculosis (then called consumption) in July 1732, about two weeks before John’s seventh birthday. Newton spent two years at boarding school before going to live in Aveley in Essex, the home of his father's new wife.

At age eleven he first went to sea with his father. Newton sailed six voyages before his father retired in 1742. At that time, Newton’s father made plans for him to work at a sugarcane plantation in Jamaica. Instead, Newton signed on with a merchant ship sailing to the Mediterranean Sea.

In 1743, while going to visit friends, Newton was captured and pressed into the naval Service by the Royal Navy. He became a midshipman aboard HMS Harwich. At one point Newton tried to desert and was punished in front of the crew of 350. Stripped to the waist and tied to the grating, he received a flogging of eight dozen lashes and was reduced to the rank of a Common seaman.

Newton did not get along with the crew of Pegasus. In 1745 they left him in West Africa with Amos Clowe, a slave dealer. Clowe took Newton to the coast and gave him to his wife, Princess Peye of the Sherbro people. She abused and mistreated Newton equally as much as she did her other slaves. Newton later recounted this period as the time he was "once an infidel and libertine, a servant of slaves in West Africa."

While in West Africa (1748–49), Newton acknowledged the inadequacy of his spiritual life. He became ill with a fever and professed his full belief in Christ, asking God to take control of his destiny. He later said that this was the first time he felt totally at peace with God.

In 1750 Newton married his childhood sweetheart, Mary Catlett, in St. Margaret's Church, Rochester.

In 1755 Newton was appointed as tide surveyor (a tax collector) of the Port of Liverpool, again through the influence of Manesty. In his spare time, he studied Greek, Hebrew, and Syriac, preparing for serious religious study. He became well known as an evangelical lay minister. In 1757, he applied to be ordained as a priest in the Church of England, but it was more than seven years before he was eventually accepted.

Newton came to believe that during the first five of his nine years as a slave trader he had not been a Christian in the full sense of the term. In 1763 he wrote: "I was greatly deficient in many respects ... I cannot consider myself to have been a believer in the full sense of the word, until a considerable time afterwards."

Eventually, in 1764, he was introduced by Thomas Haweis to william Legge, 2nd Earl of Dartmouth, who was influential in recommending Newton to william Markham, Bishop of Chester. Haweis suggested Newton for the living of Olney, Buckinghamshire. On 29 April 1764 Newton received deacon's orders, and finally was ordained as a priest on 17 June.

In 1767 william Cowper, the poet, moved to Olney. He worshipped in Newton's church, and collaborated with the priest on a volume of hymns; it was published as Olney Hymns in 1779. This work had a great influence on English hymnology. The volume included Newton's well-known hymns: "Glorious Things of Thee Are Spoken," "How Sweet the Name of Jesus Sounds!," "Let Us Love, and Sing, and Wonder," "Come, My Soul, Thy Suit Prepare," "Approach, My Soul, the Mercy-seat", and "Faith's Review and Expectation," which has come to be known by its opening phrase, "Amazing Grace".

Some five years later, in 1772, Thomas Scott took up the curacy of the neighbouring parishes of Stoke Goldington and Weston Underwood. Newton was instrumental in converting Scott from a cynical ‘career priest’ to a true believer, a conversion which Scott related in his spiritual autobiography The Force Of Truth (1779). Later Scott became a biblical commentator and co-founder of the Church Missionary Society.

In 1779 Newton was invited by John Thornton to become Rector of St Mary Woolnoth, Lombard Street, London, where he officiated until his death. The church had been built by Nicholas Hawksmoor in 1727 in the fashionable Baroque style. Newton was one of only two evangelical Anglican Priests in the capital, and he soon found himself gaining in popularity amongst the growing evangelical party. He was a strong supporter of evangelicalism in the Church of England. He remained a friend of Dissenters (such as Methodists and Baptists) as well as Anglicans.

In 1788, 34 years after he had retired from the slave trade, Newton broke a long silence on the subject with the publication of a forceful pamphlet Thoughts Upon the Slave Trade, in which he described the horrific conditions of the slave ships during the Middle Passage. He apologised for "a confession, which ... comes too late ... It will always be a subject of humiliating reflection to me, that I was once an active instrument in a Business at which my heart now shudders." He had copies sent to every MP, and the pamphlet sold so well that it swiftly required reprinting.

In 1792, Newton was presented with the degree of Doctor of Divinity by the College of New Jersey (now Princeton University).

Newton's wife Mary Catlett died in 1790, after which he published Letters to a Wife (1793), in which he expressed his grief. Plagued by ill health and failing eyesight, Newton died on 21 December 1807 in London. He was buried beside his wife in St. Mary Woolnoth in London. Both were reinterred at the Church of St. Peter and Paul in Olney in 1893.