Telford was born on 9 August 1757 at Glendinning, a hill farm 3 miles east of Eskdalemuir Kirk, in the rural parish of Westerkirk, in Eskdale, Dumfriesshire. His Father John Telford, a shepherd, died soon after Thomas was born. Thomas was raised in poverty by his mother Janet Jackson (died 1794).

The punning nickname Colossus of Roads was given to Telford by his friend, the eventual Poet Laureate, Robert Southey. Telford's reputation as a man of letters may have preceded his fame as an engineer: he had published poetry between 1779 and 1784, and an account of a tour of Scotland with Southey. His will left bequests to Southey (who would later write Telford's biography), the poet Thomas Campbell (1777–1844) and to the publishers of the Edinburgh Encyclopædia (to which he had been a contributor).

At the age of 14 he was apprenticed to a stonemason, and some of his earliest work can still be seen on the bridge across the River Esk in Langholm in the Scottish borders. He worked for a time in Edinburgh and in 1782 he moved to London where, after meeting Architects Robert Adam and Sir william Chambers, he was involved in building additions to Somerset House there. Two years later he found work at Portsmouth dockyard and — although still largely self-taught — was extending his talents to the specification, design and management of building projects.

In 1787, through his wealthy patron william Pulteney, he became Surveyor of Public Works in Shropshire. Civil engineering was a discipline still in its infancy, so Telford was set on establishing himself as an Architect. His projects included renovation of Shrewsbury Castle, the town's prison (during the planning of which he met leading prison reformer John Howard), the Church of St. Mary Magdalene, Bridgnorth and another church, St Michael, in Madeley. Called in to advise on a leaking roof at St Chad's Church Shrewsbury in 1788, he warned the church was in imminent danger of collapse; his reputation was made locally when it collapsed 3 days later, but he was not the Architect for its replacement.

As the Shropshire county surveyor, Telford was also responsible for bridges. In 1790 he designed a bridge carrying the London–Holyhead road over the River Severn at Montford, the first of some 40 bridges he built in Shropshire, including major crossings of the Severn at Buildwas, and Bridgnorth. The bridge at Buildwas was Telford's first iron bridge. He was influenced by Abraham Darby's bridge at Ironbridge, and observed that it was grossly over-designed for its function, and many of the component parts were poorly cast. By contrast, his bridge was 30 ft (10 m) wider in span and half the weight, although it now no longer exists. He was one of the first Engineers to test his materials thoroughly before construction. As his engineering prowess grew, Telford was to return to this material repeatedly.

Telford's reputation in Shropshire led to his appointment in 1793 to manage the detailed design and construction of the Ellesmere Canal, linking the ironworks and collieries of Wrexham via the north-west Shropshire town of Ellesmere, with Chester, utilising the existing Chester Canal, and then the River Mersey.

The same period also saw Telford involved in the design and construction of the Shrewsbury Canal. When the original Engineer, Josiah Clowes, died in 1795, Telford succeeded him. One of Telford's achievements on this project was the design of Longdon-on-Tern Aqueduct, the cast-iron aqueduct at Longdon-on-Tern, pre-dating that at Pontcysyllte, and substantially bigger than the UK's first cast-iron aqueduct, built by Benjamin Outram on the Derby Canal just months earlier. The aqueduct is no longer in use, but is preserved as a distinctive piece of canal engineering.

Most notably (and again william Pulteney was influential), in 1801 Telford devised a master plan to improve communications in the Highlands of Scotland, a massive project that was to last some 20 years. It included the building of the Caledonian Canal along the Great Glen and redesign of sections of the Crinan Canal, some 920 miles (1,480 km) of new roads, over a thousand new bridges (including the Craigellachie Bridge), numerous harbour improvements (including works at Aberdeen, Dundee, Peterhead, Wick, Portmahomack and Banff), and 32 new churches.

Telford also undertook highway works in the Scottish Lowlands, including 184 miles (296 km) of new roads and numerous bridges, ranging from a 112 ft (34 m) span stone bridge across the Dee at Tongueland in Kirkcudbright (1805–06) to the 129 ft (39 m) tall Cartland Crags bridge near Lanark (1822).

Telford was consulted in 1806 by the King of Sweden about the construction of a canal between Gothenburg and Stockholm. His plans were adopted and construction of the Göta Canal began in 1810. Telford travelled to Sweden at that time to oversee some of the more important initial excavations.

Many of Telford's projects were undertaken due to his role as a member of the Exchequer Bill Loan Commission, an organ set up under the Poor Employment Act of 1817, to help Finance public work projects that would generate employment.

On the island of Anglesey a new embankment across the Stanley Sands to Holyhead was constructed, but the crossing of the Menai Strait was the most formidable challenge, overcome by the Menai Suspension Bridge (1819–26). Spanning 580 feet (180 m), this was the longest suspension bridge of the time. Unlike modern suspension bridges, Telford used individually linked 9.5-foot (2.9 m) iron eye bars for the cables.

In 1820, Telford was appointed the first President of the recently formed Institution of Civil Engineers, a post he held until his death.

In 1821, he was elected a foreign member of the Royal Swedish Academy of Sciences.

An Act of Parliament in 1823 provided a grant of £50,000 for the building of up to 40 churches and manses in communities without any church buildings (hence the alternative name: 'Parliamentary Church' or 'Parliamentary Kirk'). The total cost was not to exceed £1500 on any site and Telford was commissioned to undertake the design. He developed a simple church of T-shaped plan and two manse designs – a single-storey and a two-storey, adaptable to site and ground conditions, and to brick or stone construction, at £750 each. Of the 43 churches originally planned, 32 were eventually built around the Scottish highlands and islands (the other 11 were achieved by redoing existing buildings). The last of these churches was built in 1830. Some have been restored and/or converted to private use.

Other works by Telford include the St Katharine Docks (1824–28) close to Tower Bridge in central London, where he worked with the Architect Philip Hardwick, the Gloucester and Berkeley Ship Canal (today known as the Gloucester and Sharpness Canal), Over Bridge near Gloucester, the second Harecastle Tunnel on the Trent and Mersey Canal (1827), and the Birmingham and Liverpool Junction Canal (today part of the Shropshire Union Canal) – started in May 1826 but finished, after Telford's death, in January 1835. At the time of its construction in 1829, Galton Bridge was the longest single span in the world. He also built Whitstable harbour in Kent in 1832, in connection with the Canterbury and Whitstable Railway with an unusual system for flushing out mud using a tidal reservoir. He also completed the Grand Trunk after James Brindley died due to being over-worked.

Telford's young draughtsman and clerk 1830–34 George Turnbull in his diary states:

Telford's autobiography, titled The Life of Thomas Telford, Civil Engineer, written by himself, was published in 1838.

The Borough of County Line in Montgomery County, Pennsylvania changed its name to Telford in 1857, after the North Pennsylvania Railroad Company named its new station there "Telford" in honour of Thomas Telford.

When a new town was being built in the Wrekin area of Shropshire in 1968, it was named Telford in his honour. In 1990, when it came to naming one of Britain's first City Technology Colleges, to be situated in Telford, Thomas Telford was the obvious choice. Thomas Telford School is consistently among the top performing comprehensive schools in the country.

in 2008, a footbridge was erected over the Shubenacadie Canal in Dartmouth, Nova Scotia and named for Telford who made important contributions to the nineteenth century Canadian canal.

Among other structures, this involved the spectacular Pontcysyllte Aqueduct over the River Dee in the Vale of Llangollen, where Telford used a new method of construction consisting of troughs made from cast iron plates and fixed in masonry. Extending for over 1,000 feet (300 m) with an altitude of 126 feet (38 m) above the valley floor, the Pontcysyllte Aqueduct consists of nineteen arches, each with a forty-five foot span. Being a pioneer in the use of cast-iron for large scaled structures, Telford had to invent new techniques, such as using boiling sugar and lead as a sealant on the iron connections. Eminent canal Engineer william Jessop oversaw the project, but he left the detailed execution of the project in Telford's hands. The aqueduct was designated a UNESCO World Heritage Site in 2009.

In 2011 he was one of seven inaugural inductees to the Scottish Engineering Hall of Fame.

Edinburgh's Telford College (incorporated into Edinburgh College since October 2012), was named in honour of the famous Engineer.

Further afield Telford designed a road to cross the centre of the Isle of Arran. Named the 'String road', this route traverses bleak and difficult terrain to allow traffic to cross between east and west Arran avoiding the circuitous coastal route. His work on improving the Glasgow – Carlisle road, later to become the A74, has been described as "a model for Future Engineers."