Gross was born in Middletown, Ohio, the son of Shirley, a homemaker, and Sewell M. Gross, a sales manager for AK Steel Holding. He was raised a Presbyterian. His family moved to San Francisco in 1954. Gross graduated from Duke University, where he joined Phi Kappa Psi. He served in the Navy, and earned an MBA from the University of California, Los Angeles. Gross briefly played blackjack professionally in Las Vegas, and has said that he applies many of his gambling methods for spreading risk and calculating odds to his investment decisions. In the 1990s he authored two popular-market books on investing, Bill Gross on Investing and Everything You've Heard About Investing is Wrong.

Gross is one of the world's largest mutual fund managers, focusing mostly on bonds. Called "the nation's most prominent bond investor" by the New York Times, he co-foundedPacific Investment Management (PIMCO) and currently manages PIMCO's Total Return fund (the world's largest bond fund and fifth largest mutual fund) and several smaller ones.

In September 2008, by holding large positions in agency backed mortgage bonds of Fannie Mae and Freddie Mac, Gross netted U.S. $1.7 billion after the Federal takeover of Fannie Mae and Freddie Mac for which he had lobbied.

According to the Forbes 400 in 2007, he is the 380th richest person in America and the 897th richest person in the world, with a net worth of $1.3 billion. In 2009 he was named the world's 32nd most powerful man by Forbes.

Gross is also a prominent stamp collector. As of November 2005, he became the third person (after Robert Zoellner in the 1990s and Benjamin K Miller pre-1925) to form a complete collection of 19th century United States postage stamps. In October 2005, he purchased at auction for $2.97 million a unique plate block of the famous 1918 24-cent U.S. airmail stamps known as the "Inverted Jenny," featuring an engraving of a Curtiss JN-4 biplane printed upside-down. He then traded the Inverted Jenny Plateblock to Donald Sundman, President of Mystic Stamp Company, a stamp dealer, for a 1-cent 1868 "Z Grill" depicting Benjamin Franklin, thus completing Gross's 19th century collection.

He had donated $23.5 million to Duke University, $20 million of which was set aside for financial aid, in 2005.

In 2006, Gross donated to Médecins Sans Frontières the 9.1 million U.S. dollars that he earned from the auction at Shreves Philatelic Galleries of his British philatelic collections. His Scandinavian and Finnish collections were sold by Spink auction house in May 2008 to make a donation to the Millennium Villages Project.

In 2009, Gross bought a house on Harbor Island in Newport Beach, California for 23 million and then tore it down.