Covey was born to Stephen Glenn Covey and Irene Louise Richards Covey in Salt Lake City, Utah, on October 24, 1932. Louise was the daughter of Stephen L Richards, an apostle and counselor in the first presidency of The Church of Jesus Christ of Latter-day Saints under David O. McKay. Covey was the grandson of Stephen Mack Covey who founded the original Little America Wyoming near Granger, Wyoming.

Covey was a practicing member of The Church of Jesus Christ of Latter-day Saints. He served a two-year mission in England for the LDS Church. Covey served as the first President of the Irish Mission of the church starting in July 1962.

Covey's book Spiritual Roots of Human Relations was published in 1972 by Deseret Book Company.

In 1985 Covey established Stephen R. Covey and Associates which in 1987 became The "Covey Leadership Center" which, in 1997, merged with Franklin Quest to form FranklinCovey, a global professional-services firm and specialty retailer selling both training and productivity tools to individuals and to organizations. Their mission statement reads: "We enable greatness in people and organizations everywhere".

The 7 Habits of Highly Effective People, Covey's best-known book, has sold more than 25 million copies worldwide since its first publication in 1989. The audio version became the first non-fiction audio-book in U.S. publishing history to sell more than one million copies. Covey argues against what he calls "The Personality Ethic", something he sees as prevalent in many modern self-help books. He promotes what he labels "The Character Ethic": aligning one’s values with so-called "universal and timeless" principles. Covey adamantly refuses to conflate principles and values; he sees principles as external natural laws, while values remain internal and subjective. Covey proclaims that values govern people's behavior, but principles ultimately determine the consequences. Covey presents his teachings in a series of habits, manifesting as a progression from dependence via independence to interdependence.

Covey lived with his wife Sandra and their family in Provo, Utah, home to Brigham Young University, where Covey taught prior to the publication of his best-selling book. A father of nine and a grandfather of fifty-two, he received the Fatherhood Award from the National Fatherhood Initiative in 2003.

Covey's 2004 book The 8th Habit: From Effectiveness to Greatness was published by Free Press, an imprint of Simon & Schuster. It is the sequel to The 7 Habits. Covey posits that effectiveness does not suffice in what he calls "The Knowledge Worker Age". He says that "[t]he challenges and complexity we face today are of a different order of magnitude." The 8th habit essentially urges: "Find your voice and inspire others to find theirs."

In March 2008, Covey launched the Stephen Covey's Online Community. The site was a collection of online courses, goal management and social networking. Covey used it to teach his thoughts and ideas on current topics and self leadership.

In 2009 Covey launched a career development webinar series to help people struggling in the economic downturn. Its purpose was to offer timely and current topics on a regular basis.

Covey developed his 2008 book The Leader in Me into several education-related projects. On April 20, 2010 he made his first post to an education blog entitled Our Children and the Crisis in Education which appears on the Huffington Post news and blog-aggregation website. FranklinCovey also established a Web site dedicated exclusively to The Leader in Me concept, and it holds periodic conferences and workshops to train elementary school administrators who want to integrate The Leader in Me process into their school's academic culture.

Covey died from complications resulting from the bike accident at the Eastern Idaho Regional Medical Center in Idaho Falls, Idaho, on July 16, 2012, at the age of 79.

Covey released The Leader in Me — How Schools and Parents Around the World Are Inspiring Greatness, One Child at a Time in November 2008. It tells how "some schools, parents and Business Leaders are preparing the next generation to meet the great challenges and opportunities of the 21st Century. It shows how an elementary school in Raleigh, North Carolina, decided to try incorporating The 7 Habits of Highly Effective People and other basic leadership skills into the curriculum in unique and creative ways. Inspired by the success of Principal Muriel Summers and the teachers and staff of A.B. Combs Elementary School in Raleigh, other schools and parents around the world have adopted the approach and have seen remarkable results".