Mehdi Hassan was born on 18 July 1927 in a village called Luna in Jhunjhunu district in British India into a family of traditional Musicians. He claims to be the 16th generation of hereditary Musicians hailing from the Kalawant clan of Musicians. Mehdi Hassan had his musical grooming from his father Ustad Azeem Khan and uncle Ustad Ismail Khan who were both traditional Dhrupad Singers. Hassan started to perform at a young age and the first concert of dhrupad and kheyal with his elder brother is reported to have been held in Fazilka Bungla, near present DC House (1935) of Undivided Punjab. His elder brother Pandit Ghulam Qadir also was very encouraging in sharpening his skills.

In 1947, India became independent and its partition took place, creating a new, Muslim-majority country, Pakistan. The 20-year-old Hassan and his family migrated to Pakistan, carrying little with them by way of material goods. They suffered severe financial hardships in their new country. Mehdi initially started working in Chichawatni, in a bicycle shop Mughal Cycle House. He later became a car and diesel tractor mechanic. Despite the financial hardships, he kept up the routine of his singing practice on a daily basis.

In 1957, Mehdi Hassan was again given the opportunity to sing on Radio Pakistan, primarily as a thumri singer, which earned him recognition within the musical fraternity. He had a passion for Urdu poetry, and therefore, he began to experiment by singing ghazals on a part-time basis. He cites radio officers Z.A. Bukhari and Rafiq Anwar as additional influences in his progression as a ghazal singer. He first sang on Radio Pakistan in 1952. His first film song was "Nazar Milte Hi Dil Ki Bat Ka Charcha Na Ho Jaye" film Shikar in 1956. This song was written by poet Yazdani Jalandhari and its music was composed by Asghar Ali M. Husain. In 1964, his ghazal for a film Farangi, "Gulon mein rang bharay, baad-e-naubahar chale" written by renowned Pakistani poet Faiz Ahmed Faiz and composed by Rasheed Attre, gave him a major breakthrough into the Pakistani film industry and he never looked back after that. Even the original ghazal poet Faiz Ahmed Faiz stopped reciting it in his 'mushairas' (poetry reciting events) and, instead, recommended that the audience ask Mehdi Hassan to sing it for them because the poet jokingly used to say that the ghazal belonged to Mehdi Hassan after its popularity.

In 1977, Lata Mangeshkar was so moved by his dulcet vocals during a New Delhi concert that she’s reported to have said, “Aisa lagta hai ke unke gale mein bhagwan boltein hain,” (It feels like God is singing through his voice). In October 2010, HMV Label released "Sarhadein" in which probably the first and last duet song Tera Milana featuring Mehdi Hassan and Lata Mangeshkar was released. This song was composed by Mehdi Hassan himself, written by Farhat Shahzad.Mehdi Hassan recorded it in Pakistan in 2009, and Lata Mangeshkar later heard the track and recorded her part in India in 2010, and the song was later mixed together for a duet. The same duet, "Tera Milna," was also sung by Mehdi Hassan and Noor Jehan.

He had been the recipient of numerous awards and recognitions: the Tamgha-i-Imtiaz granted to him by Gen Ayub Khan; the Pride of Performance bestowed on him by Gen Ziaul Haq; and the Hilal-i-Imtiaz conferred by Gen Pervez Musharraf. Besides the Nigar Film and Graduate Awards from Pakistan, he was presented the Saigal Award in Jalandhar, India, in 1979, whereas the Gorkha Dakshina Bahu Award was given to him in Nepal in 1983. Recently, he travelled to Dubai to receive yet another award.

Following a severe illness in the late 1980s, Mehdi Hassan stepped down from playback singing. Later due to severity of his illness he completely departed from music.

Populus Global in association with Musicolor organised the first tribute to shahensha-e-ghazal Mehdi Hassan on 14 July 2012. Ustad Mohan Khan, "ganda bandh shagird" of the ghazal king, paid tribute to his guru.