Born in Baltimore, Maryland, on July 3, 1956, Williams attended Andover High School in neighboring Linthicum, Maryland, where he was elected President of his class in both his junior and senior years. He was a good student, athlete, and musician, and active in countywide student government issues in Annapolis, Maryland.

Williams enlisted in the U.S. Marine Corps upon graduating high school in 1974. He completed Boot Camp at Marine Corps Recruit Depot Parris Island, South Carolina and Desert Warfare Training Center at Marine Corps Air Ground Combat Center Twentynine Palms, near Palm Springs, California, where he placed in the Naval Academy Preparatory School (NAPS) at Naval Station Newport, Rhode Island. He completed the one-year NAPS course and was accepted to the four-year officer training program at the U.S. Naval Academy as part of the Class of 1980.

He arrived at Annapolis on July 6, 1976, and was honorably discharged as a corporal from the Marines, and sworn into the Navy as a midshipman. Williams graduated from Annapolis in 1980 with a degree in general engineering and a minor in international security affairs. Upon his graduation, he became the first African American enlisted Marine to complete and graduate both the Naval Academy Prep School and Annapolis.

Commissioned as an ensign in the Restricted Line, he completed Naval Cryptologic Officer training. Williams spent the following year and a half in Guam as a cryptologic officer for naval intelligence, where he served at sea and ashore. In 1982, he was transferred to the Defense Language Institute in Monterey, California, where he studied the Russian language for one year.

After three years aboard submarines, Williams, now a lieutenant, was made supervising cryptologic officer with the Naval Security Fleet Support Division at Fort Meade, Maryland. It was while counseling his crew that he discovered a gift for public speaking. In 1988, he began conducting informal counseling for the wives and families of the servicemen in his command. He was later asked to speak to a local group of kids in Kansas City, Missouri, about the importance of leadership and how to overcome obstacles on the road to success—thus beginning a three-year career in motivational speaking.

Controversial self-declared psychic Sylvia Browne featured frequently on The Montel Williams Show from 1991 until its finale in 2008. Williams described Browne as "the most-appearing guest on a talk show in the history of television" and "the longest-running guest in daytime television", and her appearances included particularly controversial incidents relating to kidnap victims Shawn Hornbeck and Amanda Berry. Williams has been criticized for allowing his high-profile show to serve as a channel for Browne, notably by fellow retired military officer Hal Bidlack, with Bidlack publicly asking, "Commander Williams, have you lost your honor?"

Williams has two daughters, Ashley Williams (b. 1984) and Maressa Williams (b. 1988), with his first wife, Rochele See. Williams married Grace Morley, a burlesque Dancer on June 6, 1992. They have a son, Montel Brian Hank Williams (b. 1993), and a daughter, Wyntergrace Williams (b. 1994). The couple divorced in 2000. In July 2006, Williams proposed to girlfriend Tara Fowler, an American Airlines FLIGHT attendant. They married before friends and family on a beach in Bermuda on October 6, 2007. He is also featured in Making Music magazine.

Williams was once a Republican, leaving the GOP in 1993. He is a supporter of LGBT rights. He has since left the Republican Party and has been registered as an Independent. He endorsed Hillary Clinton for President as the superior choice, writing that Donald Trump poses a "clear and present danger" to the nation.

Williams has also guest-starred in episodic television and off-Broadway plays. Among other roles, he portrayed a Navy SEAL, Lieutenant Rivers, in three episodes of the television series JAG. He also produced and starred in a short-lived television series called Matt Waters, which appeared on CBS in 1996. He played an ex-Navy SEAL turned inner-city high school Teacher. In 1997 he played Lt Col Northrop, a USAF nuclear missile silo commander, in the fictional movie The Peacekeeper. In 2002, he played the judge presiding over Erica Kane's (Susan Lucci) murder trial on the ABC soap opera All My Children . In 2003 he made a guest appearance on the soap as himself to promote an episode of his own show on which several AMC stars were scheduled to appear. In 2004 he hosted American Candidate, a political reality show on Showtime. Williams has also guest-starred on Touched by an Angel and Guiding Light.

Williams produced and narrated the Starline Films documentary film 4CHOSEN: The Documentary, which tells the story about the New Jersey Turnpike shooting in 1998, and the racial profiling case that followed the incident.

Williams was diagnosed with multiple sclerosis in 1999. In the following year, Williams created the MS Foundation, a nonprofit organization with a focus on research and education. Williams has openly stated that he uses medical cannabis, stating it helps to ease his multiple sclerosis–caused neuropathic pain. Williams has become a vocal advocate of cannabis, supporting efforts to pass medical cannabis laws in states, as well as calling for full legalization. He has also said that snowboarding is his "best therapy" for MS, commenting that "When I stand up I need first to hold on to something and think about the positioning of my legs. If I were to just start walking I would fall. I have to get my brain to find my legs and then I will usually take a test step, but I say something at the time to anyone who might be watching to distract from what I'm really doing. Then I'll find places to grab as I walk and talk, sometimes even walking backwards because I have more control that way. People have no idea that I'm doing this. But when I'm snowboarding and my feet are strapped in, my brain seems to have a direct connection to my legs. After snowboarding it's night and day for my balance and walking. There's a real physical change before I get up to the mountain and when I come down. The benefits last for days."

Williams participated in the 2007 World Series of Poker main event, and planned to donate any potential winnings to American families affected by the Iraq war. He was eliminated in Day 2. During the event Williams also spoke out about the port security bill signed in 2006 that banned online Gaming sites from accepting money transactions from the U.S.

On January 30, 2008, Variety reported that CBS TV Distribution terminated The Montel Williams Show when key Fox-owned stations chose not to renew it for the 2008–09 season. On May 16, 2008 the last episode of The Montel Williams Show aired.

In September 2009, Williams made some controversial comments in which he called for violence against Republican representative Michele Bachmann. He later clarified he meant it "jokingly".

Williams's public relations representatives later apologized for his hostile outburst in an issued statement: "I mistakenly thought the reporter and Photographer in question were at the hotel to confront me about some earlier comments. I was wrong, and I apologize for my overreaction." In 2010 Williams became chief spokesman for the Poker Training Network, now Card Geniuses, a MLM-based poker instruction and playing website.

On October 1, 2014, Williams spoke in front of a Congressional committee in support of Marine Sgt. Andrew Tahmooressi, who was arrested in Tijuana, Baja California, for carrying guns across the U.S.-Mexican border.

Williams is a paid spokesperson for MoneyMutual, a lead generator for a payday lending Service. In early 2015, a controversy around this position erupted when an education Activist, André-Tascha Lammé, accused Williams on Twitter of supporting a company that harms African-American consumers. Williams denied the allegations, stating that Lammé was fundamentally incorrect in her assessment of the loans and their terms. The New York State Department of Financial Services then investigated the claims and Benjamin Lawsky issued a statement on March 10 that it "made no finding of a violation of law by Mr. Williams." He added that the department had found that "Using Mr. Williams's reputation as a trusted Celebrity endorser, MoneyMutual marketed loans to struggling consumers with sky-high interest rates - sometimes in excess of 1,300 percent." SellingSource, the parent company, was fined $2.1 million and ordered to stop advertising to New Yorkers.