Bentham was born in Spitalfields, London, into a wealthy Tory family. He was reportedly a child prodigy: he was found as a toddler sitting at his father's desk reading a multi-volume history of England, and he began to study Latin at the age of three.

He attended Westminster School and, in 1760, at age 12, was sent by his father to The Queen's College, Oxford, where he took his Bachelor's degree in 1763 and his Master's degree in 1766. He trained as a lawyer and, though he never practised, was called to the bar in 1769. He became deeply frustrated with the complexity of the English legal code, which he termed the "Demon of Chikane".

When the American colonies published their Declaration of Independence in July 1776, the British government did not issue any official response but instead secretly commissioned London lawyer and pamphleteer John Lind to publish a rebuttal. His 130-page tract was distributed in the colonies and contained an essay titled "Short Review of the Declaration" authored by Bentham, a friend of Lind's, which attacked and mocked the Americans' political philosophy.

Among his many proposals for legal and social reform was a design for a prison building he called the Panopticon. Although it was never built, the idea had an important influence upon later generations of thinkers. Twentieth-century French philosopher Michel Foucault argued that the Panopticon was paradigmatic of a whole raft of 19th-century 'disciplinary' institutions. It is said that Mexican prison "Lecumberri" was designed on the basis of this idea.

Bentham was in correspondence with many influential people. Adam Smith, for example, opposed free interest rates before he was made aware of Bentham's arguments on the subject. As a result of his correspondence with Mirabeau and other leaders of the French Revolution, he was declared an honorary citizen of France. Bentham was an outspoken critic of the revolutionary discourse of natural rights and of the violence that arose after the Jacobins took power (1792). Between 1808 and 1810, he held a personal friendship with Latin American Independence Precursor Francisco de Miranda and paid visits to Miranda's Grafton Way house in London.

In 1823, he co-founded the Westminster Review with James Mill as a journal for the "Philosophical Radicals"–a group of younger disciples through whom Bentham exerted considerable influence in British public life.

Bentham is frequently associated with the foundation of the University of London, specifically University College London (UCL), though he was 78 years old when UCL opened in 1826 and played no active part in its establishment. It is likely that without his inspiration, UCL would not have been created when it was. Bentham strongly believed that education should be more widely available, particularly to those who were not wealthy or who did not belong to the established church, both of which were required of students by Oxford and Cambridge. As UCL was the first English university to admit all, regardless of race, creed or political belief, it was largely consistent with Bentham's vision. He oversaw the appointment of one of his pupils, John Austin, as the first professor of Jurisprudence in 1829. An insight into his character is given in Michael St. John Packe's, The Life of John Stuart Mill:

Bentham left manuscripts amounting to some 5,000,000 words. Since 1968, the Bentham Project at University College London has been working on an edition of his collected works. The Project is now attempting to digitise the Bentham papers and outsource their transcription. See Transcribe Bentham below. So far, 25 volumes have appeared; there may be as many still to come before the project is completed. Most of his writing was never published in his lifetime; much of that which was published (see this list of published works) was prepared for publication by others. Several of his works first appeared in French translation, prepared for the press by Étienne Dumont. Some made their first appearance in English in the 1820s as a result of back-translation from Dumont's 1802 collection (and redaction) of Bentham's writing on civil and penal legislation. Works published in Bentham's lifetime include:

• "Short Review of the Declaration" (1776). An attack on America's Declaration of Independence.
• Fragment on Government (1776). This was an unsparing criticism of some introductory passages relating to political theory in William Blackstone's Commentaries on the Laws of England. The book, published anonymously, was well-received and credited to some of the greatest minds of the time. Bentham disagreed with Blackstone's defence of judge-made law, his defence of legal fictions, his theological formulation of the doctrine of mixed government, his appeal to a social contract and his use of the vocabulary of natural law. Bentham's "Fragment" was only a small part of a "Commentary on the Commentaries", which remained unpublished until the twentieth century.
• Introduction to Principles of Morals and Legislation (printed for publication 1780, published 1789).
• Defence of Usury (1787). Jeremy Bentham wrote a series of thirteen “Letters” addressed to Adam Smith, published in 1787 as Defence of Usury. Bentham’s main argument against the restriction is that “projectors” generate positive externalities. Gilbert K. Chesterton identified Bentham's essay on usury as the very beginning of the 'modern world.' Bentham’s arguments were very influential. “Writers of eminence” moved to abolish the restriction, and repeal was achieved in stages and fully achieved in England in 1854. There is little evidence as to Smith’s reaction. He did not revise the offending passages in The Wealth of Nations, but Smith made little or no substantial revisions after the third edition of 1784.
• Panopticon ( 1787, 1791).
• Emancipate your Colonies (1793)
• Traité de Législation Civile et Penale (1802, edited by Étienne Dumont. 3 vols)
• Punishments and Rewards (1811)
• A Table of the Springs of Action (1815)
• Parliamentary Reform Catechism (1817)
• Church-of-Englandism (printed 1817, published 1818)
• Elements of the Art of Packing (1821)
• The Influence of Natural Religion upon the Temporal Happiness of Mankind (1822, written with George Grote and published under the pseudonym Philip Beauchamp)
• Not Paul But Jesus (1823, published under the pseudonym Gamaliel Smith)
• Book of Fallacies (1824)
• A Treatise on Judicial Evidence (1825)

John Bowring, a British politician who had been Bentham's trusted friend, was appointed his literary executor and charged with the task of preparing a collected edition of his works. This appeared in 11 volumes in 1838-1843: Bowring based his edition on previously published editions (including those of Dumont) rather than Bentham's own manuscripts, and he did not reprint Bentham's works on religion at all. Bowring's work has been criticised, although it includes such interesting writings on international relations as Bentham's A Plan for an Universal and Perpetual Peace written 1786-89, which forms part IV of the Principles of International Law.

In 1952-54, Werner Stark published a three-volume set, Jeremy Bentham's Economic Writings, in which he attempted to bring together all of Bentham's writings on economic matters, including both published and unpublished material. Not trusting Bowring's edition, he painstakingly reviewed thousands of Bentham's original manuscripts and notes, a task made monumentally more difficult because of the manner in which they had been left by Bentham and organised by Bowring.

Utilitarianism

Bentham's ambition in life was to create a "Pannomion", a complete utilitarian code of law. Bentham not only proposed many legal and social reforms, but also expounded an underlying moral principle on which they should be based. This utilitarianism philosophy argued that the right act or policy was that which would cause "the greatest good for the greatest number of people", also known as "the greatest happiness principle", or the principle of utility. He wrote in The Principles of Morals and Legislation:

He also suggested a procedure for estimating the moral status of any action, which he called the Hedonistic or felicific calculus. Utilitarianism was revised and expanded by Bentham's student John Stuart Mill. In Mill's hands, "Benthamism" became a major element in the liberal conception of state policy objectives.

Bentham proposed a classification of 12 pains and 14 pleasures and 'felicific calculus' by which we might test the 'happiness factor' of any action. Nonetheless, it should not be overlooked that Bentham's 'hedonistic' theory (a term from J.J.C. Smart), unlike Mill's, is often said to lack a principle of fairness embodied in a conception of justice. In "Bentham and the Common Law Tradition", Gerald J. Postema states, "No moral concept suffers more at Bentham's hand than the concept of justice. There is no sustained, mature analysis of the notion ..." Thus, some critics object, it would be acceptable to torture one person if this would produce an amount of happiness in other people outweighing the unhappiness of the tortured individual. However, as P. J. Kelly argued in his book, Utilitarianism and Distributive Justice: Jeremy Bentham and the Civil Law, Bentham had a theory of justice that prevented such consequences. According to Kelly, for Bentham the law "provides the basic framework of social interaction by delimiting spheres of personal inviolability within which individuals can form and pursue their own conceptions of well-being." It provides security, a precondition for the formation of expectations. As the hedonic calculus shows "expectation utilities" to be much higher than natural ones, it follows that Bentham does not favour the sacrifice of a few to the benefit of the many.

Bentham's Principles of Legislation focuses on the principle of utility and how this view of morality ties into legislative practices. His principle of utility regards "good" as that which produces the greatest amount of pleasure and the minimum amount of pain and "evil" as that which produces the most pain without the pleasure. This concept of pleasure and pain is defined by Bentham as physical as well as spiritual. Bentham writes about this principle as it manifests itself within the legislation of a society. He lays down a set of criteria for measuring the extent of pain or pleasure that a certain decision will create.

The criteria are divided into the categories of intensity, duration, certainty, proximity, productiveness, purity, and extent. Using these measurements, he reviews the concept of punishment and when it should be used as far as whether a punishment will create more pleasure or more pain for a society. He calls for legislators to determine whether punishment creates an even more evil offense. Instead of suppressing the evil acts, Bentham is arguing that certain unnecessary laws and punishments could ultimately lead to new and more dangerous vices than those being punished to begin with. Bentham follows these statements with explanations on how antiquity, religion, reproach of innovation, metaphor, fiction, fancy, antipathy and sympathy, begging the question and imaginary law are not justification for the creation of legislature. Instead, Bentham is calling upon legislators to measure the pleasures and pains associated with any legislation and to form laws in order to create the greatest good for the greatest number. He argues that the concept of the individual pursuing his or her own happiness cannot be necessarily declared "right", because often these individual pursuits can lead to greater pain and less pleasure for the society as a whole. Therefore, the legislation of a society is vital to maintaining a society with optimum pleasure and the minimum degree of pain for the greatest amount of people.

Economics

His opinions about monetary economics were completely different from those of David Ricardo; however, they had some similarities to those of Thornton. He focused on monetary expansion as a means of helping to create full employment. He was also aware of the relevance of forced saving, propensity to consume, the saving-investment relationship, and other matters that form the content of modern income and employment analysis. His monetary view was close to the fundamental concepts employed in his model of utilitarian decision making.

Bentham stated that pleasures and pains can be ranked according to their value or "dimension" such as intensity, duration, certainty of a pleasure or a pain. He was concerned with maxima and minima of pleasures and pains; and they set a precedent for the future employment of the maximisation principle in the economics of the consumer, the firm and the search for an optimum in welfare economics.

Animal rights

Bentham is widely recognised as one of the earliest proponents of animal rights. He argued that the ability to suffer, not the ability to reason, should be the benchmark, or what he called the "insuperable line." If reason alone were the criterion by which we judge who ought to have rights, human infants and adults with certain forms of disability might fall short, too. In 1789, alluding to the limited degree of legal protection afforded to slaves in the French West Indies by the Code Noir, he wrote:

Gender and sexuality

Bentham said that it was the placing of women in a legally inferior position that made him choose, at the age of eleven, the career of a reformist. Bentham spoke for a complete equality between sexes.

The essay Against One's Self, argued for the liberalisation of laws prohibiting homosexuality. The essay remained unpublished during his lifetime for fear of offending public morality. It was published for the first time in 1931. While Bentham clearly disapproves of homosexuality as "irregularities of the venereal appetite," the essay chastises the society of the time for making a disproportionate response to what Bentham appears to consider a largely private offence–public displays or forced acts being dealt with rightly by other laws.

As requested in his will, Bentham's body was dissected as part of a public anatomy lecture. Afterward, the skeleton and head were preserved and stored in a wooden cabinet called the "Auto-icon", with the skeleton stuffed out with hay and dressed in Bentham's clothes. Originally kept by his disciple Thomas Southwood Smith, it was acquired by University College London in 1850. It is normally kept on public display at the end of the South Cloisters in the main building of the college, but for the 100th and 150th anniversaries of the college, it was brought to the meeting of the College Council, where it was listed as "present but not voting".

The Auto-icon has a wax head, as Bentham's head was badly damaged in the preservation process. The real head was displayed in the same case for many years but became the target of repeated student pranks, including being stolen on more than one occasion. It is now locked away securely.

The Bentham Project in UCL has launched a digitisation and crowdsourcing initiative whose aim is to engage the public in the online transcription of Bentham's unstudied manuscripts. Manuscripts can be viewed and transcribed by signing-up for an MediaWiki account in Transcription Desk via the Transcribe Bentham website.