Eisner was born in Brooklyn, New York City, the son of Jewish immigrants from Romania and Austria. His parents provided a modest life for their son. His mother was from Romania and served as the more practical and realistic parent, firmly believing that her son’s artistic tendencies would never amount to any kind of success in life. His father, an artist, was born in Vienna. He painted backdrops for vaudeville and the Jewish theater but was also a semi-successful entrepreneur and, at one point, a manufacturer in Manhattan's Seventh Avenue garment district. Believing his son should value creativity and art, the elder Eisners instilled in him a sense of duality, a balance between business and art. Eisner attended DeWitt Clinton High School. With influences that included the early 20th-century commercial artist J. C. Leyendecker, he drew for the school newspaper (The Clintonian), the literary magazine (The Magpie) and the yearbook, and did stage design, leading him to consider doing that kind of work for theater. Upon graduation, he studied under Canadian artist George Brandt Bridgman (1864—1943) for a year at the Art Students League of New York. Contacts made there led to a position as an advertising writer-cartoonist for the New York American newspaper. Eisner also drew $10-a-page illustrations for pulp magazines, including Western Sheriffs and Outlaws.

In 1936, high-school friend and fellow cartoonist Bob Kane, of future Batman fame, suggested that the 19-year-old Eisner try selling cartoons to the new comic book Wow, What A Magazine!. "Comic books" at the time were tabloid-sized collections of comic strip reprints in color. In 1935, they had begun to include occasional new comic strip-like material. Wow editor Jerry Iger bought an Eisner adventure strip called Captain Scott Dalton, an H. Rider Haggard-styled hero who traveled the world after rare artifacts. Eisner subsequently wrote and drew the pirate strip "The Flame" and the secret agent strip "Harry Karry" for Wow as well.

Eisner said that on one occasion a man who Eisner described as "a Mob type straight out of Damon Runyon, complete with pinkie ring, broken nose, black shirt, and white tie, who claimed to have 'exclusive distribution rights for all Brooklyn" asked Eisner to draw Tijuana bibles for a payment of $3.00 United States dollars per page. Eisner said that declined the offer; he described the decision as "one of the most difficult moral decisions of my life."

Wow lasted four issues (cover-dated July—September and November 1936). After it ended, Eisner and Iger worked together producing and selling original comics material, anticipating that the well of available reprints would soon run dry, though their accounts of how their partnership was founded differ. One of the first such comic-book "packagers", their partnership was an immediate success, and the two soon had a stable of comics creators supplying work to Fox Comics, Fiction House, Quality Comics (for whom Eisner co-created such characters as Doll Man and Blackhawk), and others.Turning a profit of $1.50 a page, Eisner claimed that he "got very rich before I was 22," later detailing that in Depression-era 1939 alone, he and Iger "had split $25,000 between us", a considerable amount for the time. Eisner's original work even crossed the Atlantic, with Eisner drawing the new cover of the October 16, 1937 issue of Boardman Books' comic-strip reprint tabloid Okay Comics Weekly.

In 1939, Eisner was commissioned to create Wonder Man for Victor Fox, an accountant who had previously worked at DC Comics and was becoming a comic book publisher himself. Following Fox's instructions to create a Superman-type character, and using the pen name Willis, Eisner wrote and drew the first issue of Wonder Comics. Eisner said in interviews throughout his later life that he had protested the derivative nature of the character and story. Eisner claimed that when DC Comics sued Fox, alleging Wonder Man was an illegal copy of Superman, Eisner testified in court that this was so, undermining Fox's case; Eisner even depicts himself doing so in his semi-autobiographical graphic novel, The Dreamer. However, a transcript of the proceeding, uncovered by comics historian Ken Quattro in 2010, indicates Eisner in fact supported Fox and claimed Wonder Man as an original Eisner creation.

In "late '39, just before Christmas time," Eisner recalled in 1979, Quality Comics publisher Everett M. "Busy" Arnold "came to me and said that the Sunday newspapers were looking for a way of getting into this comic book boom," In a 2004 interview, he elaborated on that meeting:

Eisner negotiated an agreement with the syndicate in which Arnold would copyright The Spirit, but, "Written down in the contract I had with 'Busy' Arnold ... and this contract exists today as the basis for my copyright ownership ... Arnold agreed that it was my property. They agreed that if we had a split-up in any way, the property would revert to me on that day that happened. My attorney went to 'Busy' Arnold and his family, and they all signed a release agreeing that they would not pursue the question of ownership" This would include the eventual backup features, "Mr. Mystic" and "Lady Luck".

Selling his share of their firm to Iger, who would continue to package comics as the S. M. Iger Studio and as Phoenix Features through 1955, for $20,000, Eisner left to create The Spirit. "They gave me an adult audience", Eisner said in 1997, "and I wanted to write better things than superheroes. Comic books were a ghetto. I sold my part of the enterprise to my associate and then began The Spirit. They wanted an heroic character, a costumed character. They asked me if he'd have a costume. And I put a mask on him and said, 'Yes, he has a costume!'"

The Spirit, an initially eight- and later seven-page urban-crimefighter series, ran with the initial backup features "Mr. Mystic" and "Lady Luck" in a 16-page Sunday supplement (colloquially called "The Spirit Section") that was eventually distributed in 20 newspapers with a combined circulation of as many as five million copies. It premiered June 2, 1940, and continued through 1952.

Eisner was drafted into the U.S. Army in "late '41, early '42" and then "had about another half-year which the government gave me to clean up my affairs before going off" to fight in World War II. He was assigned to the camp newspaper in Aberdeen, where "there was also a big training program there, so I got involved in the use of comics for training. ... I finally became a warrant officer, which involved taking a test ... that way you didn't have to go through Officer Candidate School." En route to Washington, D.C., he stopped at the Hollabird Depot in Baltimore, Maryland, where a mimeographed publication titled Army Motors was put together. "Together with the people there ... I helped develop its format. I began doing cartoons ... and we began fashioning a magazine that had the ability to talk to the G.I.s in their language. So I began to use comics as a teaching tool, and when I got to Washington, they assigned me to the business of teaching ... or selling ... preventive maintenance." Eisner then created the educational comic strip and titular character Joe Dope for Army Motors, and spent four years working in The Pentagon editing the ordnance magazine Firepower and doing "all the general illustrations ... that is, cartoons" for Army Motors. He continued to work on that and its 1950 successor magazine, P*S, subtitled "The Preventive Maintenance Monthly.

While Eisner's later graphic novels were entirely his own work, he had a studio working under his supervision on The Spirit. In particular, letterer Abe Kanegson came up with the distinctive lettering style which Eisner himself would later imitate in his book-length works, and Kanegson would often rewrite Eisner's dialogue.

Eisner's most trusted assistant on The Spirit, however, was Jules Feiffer, later a renowned cartoonist, playwright and screenwriter in his own right. Eisner later said of their working methods "You should hear me and Jules Feiffer going at it in a room. 'No, you designed the splash page for this one, then you wrote the ending ... I came up with the idea for the story, and you did it up to this point, then I did the next page and this sequence here and...' And I'll be swearing up and down that 'he' wrote the ending on that one. We never agree".

So trusted were Eisner's assistants that Eisner allowed them to "ghost" The Spirit from the time that he was drafted into the U.S. Army in 1942 until his return to civilian life in 1945. The primary wartime artists were the uncredited Lou Fine and Jack Cole, with future Kid Colt, Outlaw artist Jack Keller drawing backgrounds. Ghost writers included Manly Wade Wellman and William Woolfolk. The wartime ghosted stories have been reprinted in DC Comics' hardcover collections The Spirit Archives Vols. 5 to 11 (2001—2003), spanning July 1942 - December 1944.

On Eisner's return from service and resumption of his role in the studio, he created the bulk of the Spirit stories on which his reputation was solidified. The post-war years also saw him attempt to launch the comic-strip/comic-book series Baseball, John Law, Kewpies, and Nubbin the Shoeshine Boy; none succeeded, but some material was recycled into The Spirit.

During his World War II military service, Eisner had introduced the use of comics for training personnel, in the publication Army Motors, for which he created the cautionary bumbling soldier Joe Dope, who illustrated various methods of preventive maintenance of various military equipment and weapons. In 1948, while continuing to do The Spirit and seeing television and other post-war trends eat at the readership base of newspapers, he formed the American Visuals Corporation in order to produce instructional materials for the government, related agencies, and businesses. One of his longest-running jobs was PS, The Preventive Maintenance Monthly, a digest-sized magazine with comic-book elements that he started for the Army in 1951 and continued to work on until the 1970s with Klaus Nordling, Mike Ploog, and other artists.

Other clients of his Connecticut-based company included RCA Records, the Baltimore Colts NFL football team, and New York Telephone.

In the late 1970s, Eisner turned his attention to longer storytelling forms. A Contract with God, and Other Tenement Stories (Baronet Books, October 1978) is an early example of an American graphic novel, combining thematically linked short stories into a single square-bound volume. Eisner continued with a string of graphic novels that tell the history of New York's immigrant communities, particularly Jews, including The Building, A Life Force, Dropsie Avenue and To the Heart of the Storm. He continued producing new books into his seventies and eighties, at an average rate of nearly one a year. Each of these books was done twice ... once as a rough version to show editor Dave Schreiner, then as a second, finished version incorporating suggested changes.

Some of his last work was the retelling in sequential art of novels and myth, including Moby-Dick. In 2002, at the age of 85, he published Sundiata, based on the part-historical, part-mythical stories of a West African king, "The Lion of Mali". Fagin the Jew is an account of the life of Dickens' character Fagin, in which Eisner tries to get past the stereotyped portrait of Fagin in Oliver Twist. His last graphic novel, The Plot, an account of the making of the anti-semitic hoax The Protocols of the Elders of Zion, was completed shortly before his death and published in 2005.

In his later years especially, Eisner was a frequent lecturer about the craft and uses of sequential art. He taught at the School of Visual Arts in New York City, where he published Will Eisner's Gallery, a collection of work by his students. and wrote two books based on these lectures, Comics and Sequential Art and Graphic Storytelling and Visual Narrative, which are widely used by students of cartooning. In 2002, Eisner participated in the Will Eisner Symposium of the 2002 University of Florida Conference on Comics and Graphic Novels.

Eisner died in Lauderdale Lakes, Florida, of complications from a quadruple bypass surgery performed December 22, 2004. DC Comics held a memorial service in Manhattan's Lower East Side, a neighborhood Eisner often visited in his work, on April 7, 2005, at the Angel Orensanz Foundation on Norfolk Street.

Eisner was survived by his wife, Ann Weingarten Eisner, and their son, John. In the introduction to the 2001 reissue of A Contract with God, Eisner revealed that the inspiration for the title story grew out of the 1969 death of his leukemia-stricken teenaged daughter, Alice, next to whom he is buried. Until then, only Eisner's closest friends were aware of his daughter's life and death.

Eisner has been recognized for his work with the National Cartoonists Society Comic Book Award for 1967, 1968, 1969, 1987 and 1988, as well as its Story Comic Book Award in 1979, and its highest accolade, the Reuben Award, for 1988.

He was inducted into the Academy of Comic Book Arts Hall of Fame in 1971, and the Jack Kirby Hall of Fame in 1987. The following year, the Will Eisner Comic Industry Awards were established in his honor.

He received in 1975 the second Grand Prix de la ville d'Angoulême. The only other American author to receive this award was Robert Crumb in 1999.

With Jack Kirby, Robert Crumb, Harvey Kurtzman, Gary Panter, and Chris Ware, Eisner was among the artists honored in the exhibition "Masters of American Comics" at the Jewish Museum in New York City, New York, from September 16, 2006 to January 28, 2007.