Jarislowsky was born in Berlin, Germany, the son of Kaethe (née Gassmann) and Alfred Jarislowsky. He is the stepson of a steel mill owner in Germany, who was ousted by the Nazis for harbouring Jews. Jarislowsky emigrated to the United States in 1941 after boarding schools in the Netherlands and France. He came of age and was deeply affected by the Great Depression. In Asheville, North Carolina, he attended the college preparatory school, Asheville School, and then studied mechanical engineering for two years at Cornell University. With the US entry into World War II, he served in the US Army. He finished basic training and studied Japanese at the University of Chicago before serving in counter-intelligence in Japan after the war.

He returned to the University of Chicago in 1946 and graduated with an MA in Asian Studies and Phi Beta Kappa Honours. This was followed by a Masters in Business Administration from Harvard Business School in 1949. For the next three years, he worked as an Engineer for Alcan Aluminum in Montreal. He briefly returned to the United States, but by June 1955 he returned to Montreal where he started Jarislowsky, Fraser & Company Limited.

He was a Director of the influential C.D. Howe Institute and has also been active in numerous other corporations besides his own including SNC-Lavalin, Canfor, Southam, Swiss Bank Corp., Velan Valve Inc., Abitibi and Goodfellow Lumber Inc. He has participated in educational, cultural and charitable activities, and with his wife Gail, to date has endowed numerous eponymous university chairs in Canada including those in Economic and Cultural Transformation (Memorial University), Economic and Financial Policy (Queen's, established 1990), Environment and Health (McMaster, established 2003); Families and Work (Guelph, 2003); Religion and Conflict (Assumption University, Windsor); Public Sector Management (University of Ottawa, 2003); International Business Administration (Laval, 2000); Urology (McGill); Finance (University of Alberta, School of Business); Biotechnology (Saskatchewan, 2004); Technology and International Competition (École Polytechnique de Montréal); History (Concordia); and Public Sector Management (Ottawa, 2005), Water and Global Health (Carleton, 2016). “All these chairs are concerned with excellence,” he is quoted as saying, "something Canadians have never really espoused".

Although not involved in politics, Jarislowsky is openly against Quebec nationalism. In 1997, in a speech to the Westmount Municipal Association, Jarislowsky drew comparisons between Parizeau and Bouchard with the fascism of Franco's Spain and Hitler's Nazi Germany and told how, days after the 1995 referendum, he suggested the partition of Quebec and the transformation of Montreal into a City state. In his speech, he stated that his fellow citizens should oppose the PQ which he said, "feed on the same kind of quasi religious fervor on which all fascists feed (be it the Soviet Union, Nazi Germany of fascist Italy, etc.) A Parizeau, a Bouchard should never be underestimated and, despite lullabies, should never put one to sleep."

Cultural contributions include The Stephen A Jarislowsky Dance Studio in Vancouver, and the Gail and Stephen A. Jarislowsky Institute for Studies in Canadian Art, established in 2001 at Concordia University in Montreal. He contributes frequently to television, radio, magazines and newspapers and is a frequent lecture speaker. In 2005 he published The Investment Zoo: Taming the Bulls and the Bears which sold more than 15,000 copies in Quebec and pushed the French edition of The Da Vinci Code out of the top position on the bestseller list.

Apart from his personal Business pursuits, he is an outspoken defender of Business ethics (and a critic of ethical breaches). In 2002 he co-founded (with Claude Lamoureux) the Canadian Coalition for Good Governance to further this cause, focusing on such contemporaries as Frank Stronach and Conrad Black for their corporate excesses.

In 2007, Jarislowsky's firm, which owns 18 percent of the shares of Canfor, was embroiled in a bitter proxy fight with Vancouver-based tycoon Jim Pattison, who owns 25 percent of the company. Pattison won and ousted CEO Jim Shepherd over Canfor's poor performance and declining share price, replacing him for the interim with Jim Shepard.

In several magazine and newspaper articles between 2002 and 2004, Jarislowsky correctly predicted the deep economic recession which began in 2008 in the United States and spread around the world. On December 16, 2008, in an interview on CBC's The Current, he opined that the current recession would last at least two to five years and may last much longer if corrective measures are not taken by governments and the general public. He further argued that inflation is the only solution in the circumstances to reducing the enormous debt loads held at all levels of society and that massive and immediate government spending is also needed to stimulate the economy.

In 2011, a Journalist from La Presse, Denis Lessard, contacted him to discuss his 1997 statements. During the interview, Jarislowsky restated his opinion saying that the independence movement in Québec "is still driven by a religious fervour. The people who want the power at any cost will tell you all kind of stories to get it. It is maybe not Nazi... but it is fascist" ("[Le mouvement] est toujours animé d'une ferveur religieuse. Les gens qui veulent le pouvoir à tout prix vont raconter toutes sortes d'histoires pour l'obtenir. Ce n'est peut être pas nazi... mais c'est fasciste!") Following publication of this interview, Jarislowsky withdrew from the 2011 ADQ party congress to which he was invited.

His personal wealth was estimated at $1.42 billion in December 2017, making him the 34th richest person in Canada.