Story was born at Marblehead, Massachusetts. His father was Dr. Elisha Story, a member of the Sons of Liberty who took part in the Boston Tea Party in 1773. Dr. Story moved from Boston to Marblehead during the American Revolutionary War. His first wife, Ruth (née Ruddock) died and Story remarried in November 1778, to Mehitable Pedrick, nineteen, the daughter of a wealthy shipping merchant who lost his fortune during the war. Joseph was the first-born of eleven children of the second marriage. (Story also fathered seven children from his first marriage.)

However, the work of establishing this Union was still in its infancy and as such Marshall and Story still encountered resistance. In this case, resistance came from the Virginia Court of Appeals, later called the Virginia Supreme Court, chaired by the influential Judge Spenser Roane. Roane and the Virginia Court refused to accept the ruling of the Supreme Court and instead claimed that the Supreme Court lacked the jurisdiction to issue a ruling binding upon Virginia's courts. The notion that the Supreme Court headed a national judiciary was still not widely accepted at this point. Questions such as the Supreme Court's jurisdiction still abounded in the early Republic. The resulting case, Martin v. Hunter's Lessee, addressed whether the Court had the power under the Judiciary Act of 1789 and the Constitution to hear a case on appeal from a state court. Story, once again speaking for the unanimous majority, ruled that the Court possessed the jurisdiction to rule on such issues. Ironically, just as Fletcher v. Peck was the case that first brought Story into contact with the Supreme Court, it was his opinion that would expand that prior holding.

As a boy, Joseph studied at the Marblehead Academy until the fall of 1794, where he was taught by schoolmaster william Harris, later President of Columbia University. At Marblehead he chastized a fellow schoolmate and Harris responded by beating him in front of the school; his father withdrew him immediately afterward. Story was accepted at Harvard University in January 1795; he joined Adelphi, a student-run literary review, and was admitted to the Phi Beta Kappa Society. He graduated from Harvard in 1798, second in his class behind william Ellery Channing; he noted that his graduation was with "many bitter tears". He read law in Marblehead under Samuel Sewall, then a congressman and later chief justice of Massachusetts. He later read law under Samuel Putnam in Salem.

He was admitted to the bar at Salem, Massachusetts in 1801. As the only Lawyer in Essex County aligned with the Jeffersonian Democratic-Republicans, he was hired as counsel to the powerful Republican shipping firm of George Crowninshield & Sons. Story was also writing poetry and, in 1804, published "The Power of Solitude", one of the first long poems by an American. In 1805 he was elected to the Massachusetts House of Representatives, serving until 1808, when he succeeded a Crowninshield son to represent Essex County in the Congress, serving from December 1808 to March 1809. There he led the effort to end the 'Jefferson' embargo of maritime commerce. He re-entered private practice in Salem; and was again elected to the state House of Representatives, where he was chosen Speaker in 1811.

Story's young wife, Mary F.L. Oliver, died in June 1805, shortly after their marriage and two months after the death of his beloved father. In August 1808, he married Sarah Waldo Wetmore, the daughter of Judge william Wetmore of Boston. They had seven children but only two, Mary and william Wetmore Story, would survive to adulthood. Their son became a noted poet and sculptor—his bust of his father was mounted in the Harvard Law School Library—who would later publish The Life and Letters of Joseph Story (2 vols., Boston and London, 1851). Volume I and Volume II

Story was elected a Fellow of the American Academy of Arts and Sciences in 1810, and a member of the American Antiquarian Society in 1814. He would later serve as that society's vice-president from 1831 to 1845.

In November 1811, at the age of thirty-two, Story became the youngest Associate Justice of the Supreme Court of the United States. President James Madison nominated Story on November 15, 1811 to a seat vacated by william Cushing. John Quincy Adams was Madison's previous choice for this seat, but he declined, finding his services as a diplomat in Russia more rewarding and more useful to the United States. The United States Senate confirmed Story's nomination and Madison signed his commission on November 18, 1811. Story swore his oath and assumed office on February 3, 1812. Story remains the youngest Supreme Court Justice at appointment. Here he found a congenial home for the brilliance of his scholarship and the development and expression of his political philosophy.

Soon after Story's appointment, the Supreme Court began to bring out into plain view the powers which the United States Constitution had given it over state courts and state legislation. Chief Justice John Marshall led this effort, but Story had a very large share in the remarkable decisions and opinions issued from 1812 until 1832. From Story's early days on the Court he became one of Justice Marshall's strongest allies. Of the opinions issued at this time, Story wrote more than any justice but Marshall. Story's early jurisprudence mimicked that of the chief justice. The most significant of his early opinions were clearly those of Fairfax Devisee v. Hunter's Lessee and the subsequent Martin v. Hunter's Lessee. In Fairfax, the Court was forced to consider the constitutionality of the Confiscation Act, passed by the state of Virginia to take land from citizens who had sympathized with the British during the Revolution. This legislation ran contrary to terms of Jay's Treaty, negotiated in 1794, which provided that property was to return to the Tories. The Court, headed by Story, unanimously agree that the law was forced to give way before the terms of Jay's Treaty. This remained consistent with the larger body of the Marshall Court's work in which Story and Marshall sought to establish a strong federal Union.

On the Supreme Court's authority over state courts in civil matters of federal law (Martin v. Hunter's Lessee, 14 U.S. 304 (1816)):

On patent law (Title 35 of the United States Code), specifically regarding the patentability of inventions and the granting of patents (Lowell v. Lewis, 1 Mason. 182; 1 Robb, Pat. Cas. 131 Circuit Court, D. Massachusetts. May Term. 1817.):

In 1829 he moved from Salem to Cambridge and became the first Dane Professor of Law at Harvard University, meeting with remarkable success as a Teacher and winning the affection of his students, who had the benefit of learning from a sitting Supreme Court justice. He was a prolific Writer, publishing many reviews and magazine articles, delivering orations on public occasions, and publishing books on legal subjects which won high praise on both sides of the Atlantic. Among Story's works of this period, one of the most important is the Justice's Commentaries on the Constitution. The commentaries are divided into three sections, the first two concerning the colonial origins of the confederation and revolution, and the final section concerns the origins of the Constitution. Story's Commentaries encapsulate and expound his ideology. Within his Commentaries Story, in particular, attacks notions of state sovereignty. Even at this moment when his time on the Court was drawing towards a close, Story remained concerned with the welfare of the Union. His guide to the Constitution stressed the sovereignty of the people rather than the states, and extensively attacked those elements, i.e. southern sovereignty advocates, that Story felt could destabilize the Union. Story's Commentaries summarize much of the Justice's philosophy and demonstrate how Story, sought to use his work off the bench to continue to foster popular sovereignty over state sovereignty. Finally, Story's philosophy is made clear through the numerous references to Marshall, to whom the work is dedicated.

Story opposed Jacksonian democracy, saying it was "oppression" of property rights by republican governments when popular majorities began (in the 1830s) to restrict and erode the property rights of the minority of rich men. R. Kent Newmyer presents Story as a "Statesman of the Old Republic" who tried to be above democratic politics and to shape the law in accordance with the republicanism of Alexander Hamilton and John Marshall and the New England Whigs of the 1820s and 1830s, including Daniel Webster. Historians agree that Justice Joseph Story reshaped American law—as much or more than Marshall or anyone else—in a conservative direction that protected property rights.

Justice Story spoke at the dedication ceremony for Mount Auburn Cemetery in 1831, which set the model for dozens of subsequent addresses over the next few decades. It also helped spark the "rural cemetery" movement and to link that movement to the development of the republic. Story emphasized the ways that rural cemeteries contributed to an ordered and well-regulated republic of law. Upon his death in 1845, he was buried there "as are scores of America's celebrated political, literary, religious, and military Leaders. His grave is marked by a piece of sepulchral statuary executed by his son, william Wetmore Story."

He also edited several standard legal works. His Miscellaneous Writings, first published in 1835, appeared in an enlarged edition in 1851.

Sumner's Reports. Reports of Cases argued and determined in the Circuit Court of the United States for the First Circuit. By Charles Sumner. 3 vols. Boston, 1836–40.

Story's tenure on the Court was marked by two chief justices, John Marshall and Roger Taney. While Story was the staunchest ally and friend of the former, his relations with Taney were hardly so amicable. The transition started with the election of Andrew Jackson and the subsequent nominations of John McClean, Henry Baldwin, and James Wayne to the bench. This was further augmented with the replacement of the Chief Justice by Taney, another Jacksonian Democrat. Story was forced to come to grips with his new position in the Jacksonian court in, Proprietors of the Charles River Bridge v. Proprietors of Warren Bridge. This 1837 case involved the grant from the Massachusetts legislation, of a 40-year charter of a bridge to a group of private citizens over the Charles river. This grant was made with the provision that after the Investors collected tolls for 40 years, the bridge would fall into public hands. The success of the Charles River Bridge, coupled with the growth of the cities of Boston and Charlestown, led the Massachusetts legislature to prompt the creation of the Warren Bridge, in almost the exact location, but free of toll. The creation of a new free bridge, next to the previous one, was objectionable to the owners of the previous bridge, who launched a suit claiming the creation of a new bridge violated their rights.

Story's Reports. Reports of Cases argued and determined in the Circuit Court of the United States for the First Circuit. By W. W. Story. 3 vols. Boston, 1842–47 Vol 3

Justice Story was one of the most successful American authors of the first half of the 19th century. "By the time he turned 65, on September 18, 1844, he earned $10,000 a year from his book royalties. At this point, his salary as Associate Justice was $4,500."

Gallison's Reports. Reports of Cases in the Circuit Court of the United States for the First Circuit 2d ed. With additional Notes and References. By John Gallison. 2 vols. Boston, 1845. Vol 1 Vol 2

The Life and Letters of Joseph Story (1851) edited by his son william Wetmore Story was published in two volumes: Volume I and Volume II

Oddly perhaps the most well known of Story's opinions is not among the most significant. Maybe the most remembered of Story's opinions is that of the Amistad Case, which made into a film by the same name, released in 1997 and directed by Steven Spielberg in which Story's role was played by retired Supreme Court justice Harry Blackmun. Story's opinion, for which he spoke for the unanimous majority, ruled regarding the freedom of a group of African slaves found aboard a Spanish ship off the New England coast. Specifically, as the slave trade had been long pronounced illegal, if the Court were to find that these were free kidnapped Africans, their Spanish captors would be susceptible to prosecution. The Spaniards had claimed that under a 1795 treaty, the United States was obligated to return Spanish property, the ship and the slaves. However, Story noted that as the Africans were clearly obtained through fraud, i.e. kidnapping, as such the Spanish claims under the Treaty were fraudulent and should be disregarded. Perhaps the best illustration of the relative lack of significance of the opinion is reflected in the vote in which Story was joined by all justices but Baldwin. Despite the Southern dominance of the Court at this time, the justices sided with Story and the Africans. To the Court, the Amistad Case involved a clear violation of the prohibition of the slave trade. Unlike the rather thorny issues of slavery in the United States which the Court would attempt to decide later, this issue presented a clear Problem and remedy.