From 1862 he attended Silcoates School in Wakefield, until 1864, when he was apprenticed to a merchant's office on the Quayside in Newcastle upon Tyne where he became a clerk.

From 1870, Stead contributed articles to the fledgling liberal Darlington newspaper The Northern Echo, and in 1871 despite his inexperience, was made the Editor of the newspaper. At the time, Stead at just 22, was the youngest newspaper Editor in the country. Stead used Darlington's excellent railway connections to his advantage, increasing the newspaper's distribution to national levels. Stead was always guided by a moral mission, influenced by his faith, and wrote to a friend that the position would be "a glorious opportunity of attacking the devil".

In 1873, he married his childhood sweetheart, Emma Lucy Wilson, the daughter of a local merchant and shipowner; they would eventually have six children together. In 1876, Stead joined a campaign to repeal the Contagious Diseases Act, befriending the feminist Josephine Butler. The law was repealed in 1886.

He gained notoriety in 1876 for his coverage of the Bulgarian atrocities agitation. He is also credited as "a major factor" in helping Gladstone win an overwhelming majority in the 1880 general election.

In 1880, Stead went to London to be assistant Editor of the Liberal Pall Mall Gazette (a forerunner of the London Evening Standard), where he set about revolutionizing a traditionally conservative newspaper "written by gentlemen for gentlemen". When its Editor, John Morley, was elected to Parliament, Stead took over the role (1883–1889). When Morley was made Secretary of State for Ireland, Gladstone asked the new cabinet minister if he were confident that he could deal with that most distressful country. Morley replied that, if he could manage Stead, he could manage anything.

In 1884, Stead pressured the government to send his friend General Gordon to the Sudan to protect British interests in Khartoum. The eccentric Gordon disobeyed orders, and the siege of Khartoum, Gordon's death, and the failure of the hugely expensive Gordon Relief Expedition was one of the great imperial disasters of the period. After General Gordon's death in Khartoum in January 1885, Stead ran the first 24-point headline in newspaper history, "TOO LATE!", bemoaning the relief force's failure to rescue a national hero.

14 boxes of the papers of william Thomas Stead are held at the Churchill Archives Centre in Cambridge. The bulk of this collection comprises Stead's letters from his many correspondents including Sir Arthur Conan Doyle, william Gladstone, and Christabel Pankhurst. There are also papers and a diary relating to his time spent in Holloway Prison in 1885, and to his many publications.

Stead had often claimed that he would die from either lynching or drowning. He had published two pieces that gained greater significance in light of his fate on the Titanic. On 22 March 1886, he published an article titled "How the Mail Steamer went down in Mid Atlantic by a Survivor", wherein a steamer collides with another ship, resulting in a high loss of life due to an insufficient ratio of lifeboats to passengers. Stead had added: "This is exactly what might take place and will take place if liners are sent to sea short of boats". In 1892, Stead published a story titled "From the Old World to the New", in which a vessel, the Majestic, rescues survivors of another ship that collided with an iceberg.

The number of his publications gradually became very large, as he wrote with facility and sensationalist fervour on all sorts of subjects, from The Truth about Russia (1888) to If Christ Came to Chicago! (Laird & Lee, 1894), and from Mrs Booth (1900) to The Americanisation of the World (1901).

Stead resigned his editorship of the Pall Mall in 1889 in order to found the Review of Reviews (1890) with Sir George Newnes. It was a highly successful non-partisan monthly. The journal found a global audience and was intended to bind the empire together by synthesising all its best journalism. Stead's abundant Energy and facile pen found scope in many other directions in journalism of an advanced humanitarian type. This time saw Stead "at the very height of his professional prestige", according to E T Raymond. He was the first Editor to employ female journalists.

In the 1890s, Stead became increasingly interested in spiritualism. In 1893 he founded a spiritualist quarterly, called Borderland, in which he gave full play to his interest in psychical research. Stead was Editor and he employed Ada Goodrich Freer as assistant editor: she was also a substantial contributor under the pseudonym "Miss X". Stead claimed that he was in the habit of communicating with Freer by telepathy and automatic writing. The magazine ceased publication in 1897.

Stead claimed to be in receipt of messages from the spirit world and, in 1892, to be able to produce automatic writing. His spirit contact was alleged to be the departed Julia A. Ames, an American temperance reformer and Journalist whom he met in 1890 shortly before her death. In 1909, he established Julia's Bureau, where inquirers could obtain information about the spirit world from a group of resident mediums.

In 1893-4 he lived in Chicago for six months, campaigning against brothels and drinking dens, and published If Christ Came to Chicago.

Beginning in 1895, Stead issued affordable reprints of classic literature under such titles as Penny Poets and Penny Popular Novels, in which he "boil[ed] down the great novels of the world so that they might fit into, say, sixty-four pages instead of six hundred". His ethos behind the venture pre-dated Allen Lane's of Penguin Books by a number of years, and he became "the foremost publisher of paperbacks in the Victorian Age".

The Physiologist Ivor Lloyd Tuckett wrote that Stead had no scientific training and was credulous when it came to the subject of spiritualism. Tuckett examined a case of spirit photography that Stead had claimed was genuine. Stead visited a Photographer who produced a photograph of him with an alleged deceased soldier known as "Piet Botha". Stead claimed the Photographer could not have come across any information about Piet Botha; however, Tuckett discovered that an article in 1899 had been published on Pietrus Botha in a weekly magazine with a portrait and personal details.

In 1904 he launched The Daily Paper, which folded after six weeks, and Stead lost £35,000 of his own money (almost £3 million in 2012 value) and suffered a nervous breakdown.

In 1905, Stead travelled to Russia to try to discourage violence, but his tour and talks were unsuccessful

A memorial bronze was erected in Central Park, New York City, in 1920. It reads, "W.T. Stead 1849–1912. This tribute to the memory of a Journalist of worldwide renown is erected by American friends and admirers. He met death aboard the Titanic April 15, 1912, and is numbered amongst those who, dying nobly, enabled others to live." A duplicate bronze is located on the Thames Embankment not far from Temple, where Stead had an office.

In the early 20th century, Arthur Conan Doyle and Stead were duped into believing that the stage magicians Julius and Agnes Zancig had genuine psychic powers. Both Doyle and Stead wrote the Zancigs performed telepathy. In 1924 Julius and Agnes Zancig confessed that their mind reading act was a trick and published the secret code and all the details of the trick method they had used under the title of Our Secrets!! in a London Newspaper.

A memorial plaque to Stead can also be seen at his final home, 5 Smith Square, where he lived from 1904 to 1912. It was unveiled on 28 June 2004 in the presence of his great-great-grandson, 13 year old Miles Stead. The plaque was sponsored by the Stead Memorial Society.

In the 2009 video game Nine Hours, Nine Persons, Nine Doors, Stead's 'How the Mail Steamer Went Down in Mid Atlantic by a Survivor, From the Old World to the New, and his death on the Titanic, is discussed by Akane Kurashiki and Junpei Tenmyouji, who debate the possibility that Stead was undergoing automatic writing by connecting to his Future self.

A year before the Spanish–American War W. T. Stead traveled to New York to meet with william Randolph Hearst, to teach him Government By Journalism.

Ten years after the Titanic went down, Stead's daughter Estelle published The Blue Island: Experiences of a New Arrival Beyond the Veil, which purported to be a communication with Stead via a medium, Pardoe Woodman. In the book, Stead described his death at sea and discussed the nature of the afterlife. The manuscript was produced using automatic writing, and Ms. Stead cited as proof of its authenticity the writer's habit of going back to cross "t's" and dot "i's" while proof-reading — which she said was characteristic of her father's writing technique in life.

According to Roy Jenkins, Stead became "the most sensational figure in 19th century journalism".