Manchester grew up in Springfield, Massachusetts. His father served in the United States Marine Corps during World War I. After his father's death, and the attack on Pearl Harbor, William Manchester likewise enlisted in the U.S. Marine Corps. However, he was ordered back to college until called up. Although he had expected to serve in Europe, Manchester ultimately found himself in the Pacific Ocean theater. After rising to the rank of Sergeant, he served in Pacific War's final campaign on Okinawa, and was severely wounded.

Manchester's wartime experiences formed the basis for his very personal account of the Pacific Theater, Goodbye, Darkness: A Memoir of the Pacific War. In this memoir, Manchester uses some personal anecdotes from his service on Okinawa in his descriptions of battles on Guadalcanal and Saipan; he states this in the notes following his memoir as well as clearly denying any attempt at a chronological account, though without this additional reading at the end of his memoir, to honor those he loved, many would mistakenly believe that Manchester also served in these campaigns. He wrote of World War II in several other books, including his second of a planned three-part biography of Winston Churchill, and a biography of General Douglas MacArthur, American Caesar.

Manchester worked as a copyboy for the Daily Oklahoman in 1945 before going to college. In 1946 he received a B.A. from the University of Massachusetts and in 1947 a master's degree from the University of Missouri.

He married Julia Brown Marshall on March 27, 1948 and had one son and two daughters with her.

In 1947, Manchester went to work as a reporter for The Baltimore Sun. There he met journalist H. L. Mencken who became the subject for Manchester's master's thesis and first book, Disturber of the Peace. The biography, published in 1951, profiles Mencken, the self-described "conservative anarchist" who made his mark as a writer, editor, and political pundit in the 1920s. In 1953 Manchester published his novel The City of Anger fictionally placed in Baltimore and dealing with inner city life and the numbers racket, subjects Manchester had learned about as a big city reporter.

In 1955 Manchester left journalism as a career to became an editor for Wesleyan University and the Wesleyan University Press and spent the rest of his career at the University. For the academic year 1959-1960, he was a Fellow on the faculty at the Center for Advanced Studies of Wesleyan. He later became an adjunct professor of history, professor of history, Emeritus, and writer-in-residence at the University.

His best-selling book, The Death of a President (1967) was a detailed account of the assassination of President John F. Kennedy, who had been the subject of an earlier book by Manchester. Manchester was commissioned in 1964 by the Kennedy family to write the book. Manchester, who retraced the movements of President Kennedy and Lee Harvey Oswald before the assassination, concluded, based on his study of Oswald's psychology and their similar training as Marine sharpshooters, that Oswald had acted alone. Manchester had the support of Robert and Jacqueline Kennedy, but later had a falling-out with Robert Kennedy over Manchester's treatment of President Lyndon B. Johnson.

However, before the book could be published Jacqueline Kennedy filed a lawsuit to prevent its publication, even though she had previously authorized it. The suit was settled in 1967, reportedly by Manchester agreeing to drop certain passages dealing with details of Kennedy's family life. In response satirist Paul Krassner published a piece entitled "The Parts That Were Left Out of the Kennedy Book", which imagined censored material of an outrageously more scandalous nature than anything that could possibly have been the case. In his collection of essays Controversy (1977), Manchester detailed Kennedy's (and, likely, Johnson's) attempts to suppress the book. The book was a best-seller, but has been allowed to go out of print.

In 2001 President George W. Bush presented Manchester with the National Humanities Medal. Following the death of his wife in 1998, Manchester suffered two strokes. He announced that he would not be able to complete the previously planned third volume of his three part-biography of Churchill, Defender of the Realm, 1940-1965. He died at the age of 82 on June 1, 2004.

According to Gaddis Smith about Manchester's biography of MacArthur, "Ideologues of the Right will find the portrait too disparaging and those of the Left, too flattering." see http://www.foreignaffairs.org/19790601fabook13917/william-manchester/american-caesar-douglas-macarthur-1880-1964.html