Suffering from occasional poor health as a boy, he was educated at home by the Reverend Edward Wilson. An intelligent child, Pitt quickly became proficient in Latin and Greek. In 1773, aged fourteen, he attended Pembroke College, Cambridge, where he studied political philosophy, classics, mathematics, trigonometry, chemistry and history. At Cambridge, Pitt was tutored by George Pretyman, who became a close personal friend. Pitt later appointed Pretyman Bishop of Lincoln then Winchester and drew upon his advice throughout his political career. While at Cambridge, he befriended the young william Wilberforce, who became a lifelong friend and political ally in Parliament. Pitt tended to socialise only with fellow students and others already known to him, rarely venturing outside the university grounds. Yet he was described as charming and friendly. According to Wilberforce, Pitt had an exceptional wit along with an endearingly gentle sense of humour: "no man ... ever indulged more freely or happily in that playful facetiousness which gratifies all without wounding any." In 1776, Pitt, plagued by poor health, took advantage of a little-used privilege available only to the sons of noblemen, and chose to graduate without having to pass examinations. Pitt's father, who had by then been raised to the peerage as Earl of Chatham, died in 1778. As a younger son, Pitt the Younger received a small inheritance. He received legal education at Lincoln's Inn and was called to the bar in the summer of 1780.

Losing the war and the thirteen colonies was a shock to the British system. The war revealed the limitations of Britain's fiscal-military state when it had powerful enemies and no allies, depended on extended and vulnerable transatlantic lines of communication, and was faced for the first time since the 17th century by both Protestant and Catholic foes. The defeat heightened dissension and escalated political antagonism to the King's ministers. Inside parliament, the primary concern changed from fears of an over-mighty monarch to the issues of representation, parliamentary reform, and government retrenchment. Reformers sought to destroy what they saw as widespread institutional corruption. The result was a crisis from 1776–1783. The peace in 1783 left France financially prostrate, while the British economy boomed due to the return of American Business. That crisis ended in 1784 as a result of the King's shrewdness in outwitting Fox and renewed confidence in the system engendered by the leadership of Pitt. Historians conclude that the loss of the American colonies enabled Britain to deal with the French Revolution with more unity and organisation than would otherwise have been the case.

During the general elections of September 1780, Pitt contested the University of Cambridge seat, but lost. Still intent on entering Parliament, Pitt, with the help of his university comrade, Charles Manners, 4th Duke of Rutland, secured the patronage of James Lowther. Lowther effectively controlled the pocket borough of Appleby; a by-election in that constituency sent Pitt to the House of Commons in January 1781. Pitt's entry into parliament is somewhat ironic as he later railed against the very same pocket and rotten boroughs that had given him his seat.

After Lord North's ministry collapsed in 1782, the Whig Charles Watson-Wentworth, 2nd Marquess of Rockingham was appointed prime minister. Pitt was offered the minor post of vice-treasurer of Ireland, but he refused, considering the post overly subordinate. Lord Rockingham died only three months after coming to power; he was succeeded by another Whig, william Petty, 2nd Earl of Shelburne. Many Whigs who had formed a part of the Rockingham ministry, including Fox, now refused to serve under Lord Shelburne, the new prime minister. Pitt, however, was comfortable with Shelburne, and thus joined his government; he was appointed Chancellor of the Exchequer.

The Fox-North Coalition fell in December 1783, after Fox had introduced Edmund Burke's bill to reform the East India Company to gain the patronage he so greatly lacked while the King refused to support him. Fox stated the bill was necessary to save the company from bankruptcy. Pitt responded that: "Necessity was the plea for every infringement of human freedom. It was the argument of tyrants; it was the creed of slaves." The King was opposed to the bill; when it passed in the House of Commons, he secured its defeat in the House of Lords by threatening to regard anyone who voted for it as his enemy. Following the bill's failure in the Upper House, George III dismissed the coalition government and finally entrusted the premiership to william Pitt, after having offered the position to him three times previously.

His administration secure, Pitt could begin to enact his agenda. His first major piece of legislation as Prime Minister was the India Act 1784, which re-organised the British East India Company and kept a watch over corruption. The India Act created a new Board of Control to oversee the affairs of the East India Company. It differed from Fox's failed India Bill 1783 and specified that the Board would be appointed by the King. Pitt was appointed, along with Lord Sydney who was appointed President. The Act centralised British rule in India by reducing the power of the Governors of Bombay and Madras and by increasing that of the Governor-General, Charles Cornwallis. Further augmentations and clarifications of the Governor-General's authority were made in 1786, presumably by Lord Sydney, and presumably as a result of the Company's setting up of Penang with their own Superintendent (Governor), Captain Francis Light, in 1786.

An early favourable response to the French Revolution encouraged many in Great Britain to reopen the issue of parliamentary reform, which had been dormant since Pitt's reform bill was defeated in 1785. The reformers, however, were quickly labelled as radicals and as associates of the French Revolutionaries. Subsequently, in 1794 Pitt's administration tried three of them for treason but lost. Parliament began to enact repressive legislation in order to silence the reformers. Individuals who published seditious material were punished, and, in 1794, the writ of habeas corpus was suspended. Other repressive measures included the Seditious Meetings Act (which restricted the right of individuals to assemble publicly) and the Combination Acts (which restricted the formation of societies or organisations that favoured political reforms). Problems manning the Royal Navy also led to Pitt to introduce the Quota System in 1795 addition to the existing system of Impressment.

Another important domestic issue with which Pitt had to concern himself was the national debt, which had doubled to £243 million during the American war. Every year a third of the budget of £24 million went to pay interest. Pitt sought to reduce the national debt by imposing new taxes. In 1786, he instituted a sinking fund so that £1,000,000 a year was added to a fund so that it could accumulate interest; eventually, the money in the fund was to be used to pay off the national debt. By 1792 the debt had fallen to £170 million.

In 1788, Pitt faced a major crisis when the King fell victim to a mysterious illness, a form of mental disorder that incapacitated him. If the sovereign was incapable of fulfilling his constitutional duties, Parliament would need to appoint a regent to rule in his place. All factions agreed the only viable candidate was the King's eldest son, Prince George, Prince of Wales. The Prince, however, was a supporter of Charles James Fox; had he come to power, he would almost surely have dismissed Pitt. However, he did not have such an opportunity, as Parliament spent months debating legal technicalities relating to the regency. Fortunately for Pitt, the King recovered in February 1789, just after a Regency Bill had been introduced and passed in the House of Commons.

Throughout the 1790s, the popularity of the Society of United Irishmen led by Wolfe Tone, whom influenced by the American and French revolutions demanded independence and republicanism for Ireland, grew. The United Irishmen Society was very anti-clerical, being equally opposed to the "superstitions" promoted by both the Church of England and the Roman Catholic church, which caused the latter to support the Crown. Realising that the Catholic church was an ally in the struggle against the French revolution, Pitt had tried fruitlessly to persuade the Dublin parliament to loosen the anti-Catholic laws to "keep things quiet in Ireland". Pitt's efforts to soften the anti-Catholic laws failed in the face of determined resistance from the families of the Protestant Ascendancy in Ireland, who forced Pitt to recall Earl Fitzwilliam as Chief Secretary for Ireland in 1795, when the latter had indicated he would support a bill for Catholic relief. In much of rural Ireland, law and order had broken down as an economic crisis impoverished the already poor Irish peasantry and a sectarian war with many atrocities on both sides had began in 1793 between Catholic "Defenders" vs Protestant "Peep o'Day Boys". A section of the Peep o'Day Boys had renamed themselves the Loyal Orange Order in September 1795, who were fanatically committed to upholding Protestant supremacy in Ireland at "almost any cost". In December 1796, a French invasion of Ireland led by General Lazar Hoche that was supposed to land at the same time the United Irishmen would rise up only failed because of bad weather in the Bay of Biscay. Pitt sent General Lake to Ulster in 1797 to call out Protestant Irish militiamen and organised an intelligence network of spies and informers to crush the United Irishmen.

Most important, the British national output remained strong and the well-organized Business sector channeled products into what the military needed. Britain used its economic power to expand the Royal Navy, doubling the number of frigates and increasing the number of large ships of the line by 50%, while increasing the roster of sailors from 15,000 to 133,000 in eight years after the war began in 1793. France, meanwhile, saw its navy shrink by more than half. The system of smuggling finished products into the continent undermined French efforts to ruin the British economy by cutting off markets. By 1814, the budget that Pitt in his last years had largely shaped, had expanded to £66 million, including £10 million for the Navy, £40 million for the Army, £10 million for the Allies, and £38 million as interest on the national debt. The national debt soared to £679 million, more than double the GDP. It was willingly supported by hundreds of thousands of Investors and tax payers, despite the higher taxes on land and a new income tax. The whole cost of the war came to £831 million. By contrast the French financial system was inadequate and Napoleon's forces had to rely in part on requisitions from conquered lands.

In November 1795, the "great push" began with 218 ships leaving Portsmouth for St. Domingue. After the failure of the Quiberon expedition earlier in 1795 when a British landed a force of French royalists on the coast of France who were annihilated by the forces of the republic, Pitt had decided it was crucial for Britain to have St. Domingue, no matter what the cost in lives and money, to improve Britain's negotiating hand when it came time to make peace with the French republic. The British Historian Michael Duffy argued that since Pitt committed far more manpower and money to the Caribbean expeditions, especially the one to St. Domingue, than he ever did to Europe in the years 1793-98 that it is proper to view the West Indies as Britain's main theater of war and Europe as more of a sideshow. By 1795, 50% of the British Army was deployed in the West Indies with the largest contingent in St. Domingue with the rest of the British Army all divided between Britain, Europe, India and North America.

At one point rumours emerged of an intended marriage to Eleanor Eden, to whom Pitt had grown close. Pitt broke off the potential marriage in 1797, writing to her father, Lord Auckland, "I am compelled to say that I find the obstacles to it decisive and insurmountable".

As the British death toll caused by yellow fever continued to climb, Pitt was criticised in the House of Commons with several MPs suggesting it might be better to abandon the expedition, but Pitt insisted that Britain had given its word of honor that it would protect the French planters from their former slaves, and the expedition to St. Domingue could not be abandoned. The British attempt to conquer St. Domingue in 1793–1798 ended in disaster with the British pulling out on 31 August 1798 after having spent 4 million pounds (a sum roughly equal to about £224,120,000.00 in today's money) and having lost about 100,000 dead or men crippled for life over the preceding five years, due mostly to yellow fever, achieving nothing. The British Historian Sir John william Fortescue wrote that Pitt and his cabinet had tried to destroy French power "in these pestilent islands...only to discover, when it was too late, that they practically destroyed the British army." Fortescue concluded that Pitt's attempt to add St. Domingue to the British empire had killed off most of the British army, cost the British treasury a fortune and weakened British influence in Europe, making British power "fettered, numbered and paralyzed", all for nothing.

After France had forced peace and recognition of the French Republic from Russia in 1799 and from the Holy Roman Emperor (Austria) in 1801, the Treaty of Amiens between France and Britain marked the end of the French Revolutionary Wars. Everyone expected it to be only a short truce. By 1803, war had broken out again France under Emperor Napoleon. Although Addington had previously invited him to join the Cabinet, Pitt preferred to join the Opposition, becoming increasingly critical of the government's policies. Addington, unable to face the combined opposition of Pitt and Fox, saw his majority gradually evaporate and resigned in late April 1804.

Despite the efforts of Pitt and the British allies, the French continued to defeat the members of the First Coalition, which collapsed in 1798. A Second Coalition, consisting of Great Britain, Austria, Russia, and the Ottoman Empire, was formed, but it, too, failed to overcome the French. The fall of the Second Coalition with the defeat of the Austrians at the Marengo (14 June 1800) and at the Battle of Hohenlinden (3 December 1800) left Great Britain facing France alone.

Pitt sought to inaugurate the new kingdom by granting concessions to Roman Catholics, who formed a majority in Ireland, by abolishing various political restrictions under which they suffered. The King was strongly opposed to Catholic Emancipation; he argued that to grant additional liberty would violate his coronation oath, in which he had promised to protect the established Church of England. Pitt, unable to change the King's strong views, resigned on 16 February 1801, so as to allow Henry Addington, his political friend, to form a new administration. At about the same time, however, the King suffered a renewed bout of madness, with the consequence that Addington could not receive his formal appointment. Though he had resigned, Pitt temporarily continued to discharge his duties; on 18 February 1801, he brought forward the annual budget. Power was transferred from Pitt to Addington on 14 March, when the King recovered.

Pitt returned to the premiership on 10 May 1804. He had originally planned to form a broad coalition government, but faced the opposition of George III to the inclusion of Fox. Moreover, many of Pitt's former supporters, including the allies of Addington, joined the Opposition. Thus, Pitt's second ministry was considerably weaker than his first four.

Nevertheless, the Coalition collapsed, having suffered significant defeats at the Battle of Ulm (October 1805) and the Battle of Austerlitz (December 1805). After hearing the news of Austerlitz Pitt referred to a map of Europe, "Roll up that map; it will not be wanted these ten years."

The setbacks took a toll on Pitt's health. He had long suffered from poor health, beginning in childhood, and was plagued with gout and "biliousness" worsened by a fondness for port that began when he was advised to drink the wine to deal with his chronic ill-health. On 23 January 1806, Pitt died at Bowling Green House on Putney Heath, probably from peptic ulceration of his stomach or duodenum; he was unmarried and left no children.

Some of Pitt's other domestic plans were not as successful; he failed to secure parliamentary reform, emancipation, or the abolition of the slave trade, although this last did take place with the Slave Trade Act 1807 the year after his death. Biographer william Hague considers the unfinished abolition of the slave trade to be Pitt's greatest failure. He notes that by the end of Pitt's career, conditions were in place which would have allowed a skillful attempt to pass an abolition bill to succeed, in part due to the long campaigning Pitt had encouraged with his friend william Wilberforce. Hague goes on to note that the failure was likely due to Pitt being a "spent force" by the time favourable conditions had arisen. In Hague's opinion, Pitt's long premiership, "tested the natural limits of how long it is possible to be at the top. From 1783 to 1792 he faced each fresh challenge with brilliance; from 1793 he showed determination but sometimes faltered; and from 1804 he was worn down by... the combination of a narrow majority and war".

Pitt was an expert in Finance and served as Chancellor of the Exchequer. Critical to his success in confronting Napoleon was using Britain's superior economic resources. He was able to mobilize the nation's industrial and financial resources and apply them to defeating France. With a population of 16 million, Britain was barely half the size of France, which had a population of 30 million. In terms of Soldiers, however, the French numerical advantage was offset by British subsidies that paid for a large proportion of the Austrian and Russian Soldiers, peaking at about 450,000 in 1813.

Sir George Nicholls and Thomas Mackay write in A History of the English Poor Law (1899):

Kirby Page writes in Jesus or Christianity (1929):

Pitt's debts amounted to £40,000 when he died, but Parliament agreed to pay them on his behalf. A motion was made to honour him with a public funeral and a monument; it passed despite the opposition of Fox. Pitt's body was buried in Westminster Abbey on 22 February, having lain in state for two days in the Palace of Westminster. Pitt was succeeded as Prime Minister by his first cousin william Grenville, 1st Baron Grenville, who headed the Ministry of All the Talents, a coalition which included Charles James Fox.

William Pitt is depicted in several films and television programs. Robert Donat portrays Pitt in the 1942 biopic The Young Mr Pitt, which chronicles the historical events of Pitt's life. Pitt's attempts during his tenure as Prime Minister to cope with the dementia of King George III are portrayed by Julian Wadham in the 1994 film The Madness of King George. The 2006 film Amazing Grace, with Benedict Cumberbatch in the role of Pitt, depicts his close friendship with william Wilberforce, the leading abolitionist in Parliament. Pitt is caricatured as a boy-prime minister in the third series of the television comedy Blackadder, in which Simon Osborne plays a fictionalized Pitt as a petulant teenager who has just come to power "right in the middle of (his) exams". In the series of prime ministerial biographies Number 10, produced by Yorkshire Television, Pitt was portrayed by Jeremy Brett.

From the castle, he helped organise a local Volunteer Corps in anticipation of a French invasion, acted as colonel of a battalion raised by Trinity House – he was also a Master of Trinity House – and encouraged the construction of Martello towers and the Royal Military Canal in Romney Marsh. He rented land abutting the Castle to farm, and on which to lay out trees and walks. His niece Lady Hester Stanhope designed and managed the gardens and acted as his hostess.