Borg was born into a Lutheran family of Swedish and Norwegian descent, the youngest of four children. He grew up in the 1940s in North Dakota and attended Concordia College, Moorhead, a small liberal arts school in Moorhead, Minnesota. While at Moorhead he was a columnist for the school paper and held forth as a conservative. After a close reading of the Book of Amos and its overt message of social equality he immediately began writing with an increasingly liberal stance and was eventually invited to discontinue writing his articles due to his new-found liberalism. He did graduate work at Union Theological Seminary and obtained masters and DPhil degrees at Oxford under G. B. Caird. Anglican bishop N.T. Wright had studied under the same professor and many years later Borg and Wright were to share in co-authoring The Meaning of Jesus: Two Visions, an amicable study in contrast. Following a period of religious questioning in his mid-thirties, and numinous experiences similar to those described by Rudolf Otto, Borg became active in the Episcopal Church, in which his wife, the Reverend Canon Marianne Wells-Borg, serves as a priest and directs a spiritual development program at the Trinity Episcopal Cathedral, Portland, Oregon. On May 31, 2009, Borg was installed as the first canon theologian at Trinity Episcopal Cathedral.

Borg advocates entering into relationship with God as more important than belief about God. He has a panentheist understanding of God, which sees God as both indwelling in everything and transcendent. He teaches that a historical-metaphorical approach to the Bible is more meaningful for today's world than is the historical-grammatical approach or that of biblical literalism. He also distinguishes between the pre-Easter Jesus, who was a Jewish mystic and the founder of Christianity, and the post-Easter Jesus who is a divine reality that Christians can still experience personally.

Borg does not believe that the Bible has to be taken literally if it is to be taken seriously, an idea he develops in his book Reading the Bible Again for the First Time, subtitled Taking the Bible Seriously but Not Literally. He claims that truths can be found in the many messages and metaphors of the Bible stories even though he states that such stories may not have actually happened at all. Rather than asking what the events in certain New Testament stories actually were, he challenges his audience with another question, 'What effect must this man Jesus have had on the people he came into contact with for so many rich stories to have been written about him after his life?'

In Reading the Bible Again for the First Time, Borg describes the historical-metaphorical approach to reading the Bible as a post-modern response to biblical scholarship, cultural diversity, and religious diversity. Specifically, Borg asserts that the Bible is a library of books (the Greek ta biblia means "the books," plural) that, while of human origin, were written in response to real experiences of the divine. The Bible is sacred because of its centrality to a particular community, rather than any divine origin. As such, the Bible has authority because it is a text that records our ancestors' dialogue about God, and is the foundation for our ongoing dialogue today. This stands in contrast to the traditional view of the Bible as a monarchial decree. Additionally, the Bible is sacred because it is a "means of grace," a "vehicle by which God becomes present."

Borg summarizes his description of the historical-metaphorical approach by stating that the Bible is the Word of God metaphorically. That is, "Word" is singular and uppercase instead of plural and lowercase (i.e. the words of God). Thus, the Bible is like a lens. It's what the lens helps us do (see God), and not the lens as an object that is central. The Bible, therefore, is a mediator - the means, not the end. More precisely, the Bible is "the foundation of the Christian cultural-linguistic world." By cultural-linguistic, Borg means that language, among other things, consists of symbols that represent a culture's values. Religion emerges from this and can take on an existence independent of that culture, becoming a cultural-linguistic world of its own.