Green was born near Tewkesbury, Gloucestershire, into an educated family with successful business interests. His father Vincent Wodehouse Yorke- the son of John Reginald Yorke and Sophia Matilda de Tuyll de Serooskerken- was a wealthy landowner and industrialist in Birmingham His mother, Hon. Maud Evelyn Wyndham, was daughter of the second Baron Leconfield. Green grew up in Gloucestershire and attended Eton College, where he became friends with fellow pupil Anthony Powell and wrote most of his first novel, Blindness. He went on to study at Oxford University and there began a friendship and literary rivalry with Evelyn Waugh.

Green left Oxford in 1926 without taking a degree and returned to Birmingham to engage in his family business. He started by working with the ordinary workers on the factory floor of his family's factory, which produced beer-bottling machines, and later became the managing director there. During this time he gained the experience to write Living, his second novel, which was written during 1927 and 1928. Sebastian Faulks on Henry Green | Review | guardian.co.uk Books In 1929 he married his second cousin (they were both great-grandchildren of the 1st Baron Leconfield), the Hon. Adelaide Biddulph, also known as 'Dig'. Their son Sebastian was born in 1934. In 1940, Green published Pack My Bag, which he regarded as a nearly-accurate autobiography. During World War II he served as a fireman in the Auxiliary Fire Service and these wartime experiences are echoed in his novel Caught; they were also a strong influence on his subsequent novel, Back. Politically, Green was a rather traditional Tory his entire life.

Green's novels are often described as being, along with those of Virginia Woolf, among the most important works of English modernist literature. In his later years, he became increasingly focused on studies of the Ottoman Empire. He stopped his writing career in 1952, after releasing nine novels and a memoir. In 1993, Surviving, a collection of previously unpublished works, was released, edited by his grandson Matthew Yorke and published by Viking Press.

In his essay The Genesis of Secrecy, British literary critic Frank Kermode discussed Green's novel Party Going and suggested that behind its realistic surface the book hides a complex network of mythical allusions. This led Kermode to include Green in the Modernist movement, and consider the novelist strongly influenced by T.S. Eliot's idea of a "mythic method".

Green's work has received comparatively little critical attention from academics. One of the few academics engaged with Green's work is Jeremy Treglown, author of "Romancing: The Life and Work of Henry Green" (Faber and Faber, 2000).

John Updike listed Green as an influence during an interview on the "Charlie Rose Green Room", a feature on Rose's website. Updike also wrote the introduction to an edition of three of Green's novels: 'Living', 'Loving' and 'Party Going'.