Hope was born in Clapton, then on the edge of London, where his father, the Reverend Edward Connerford Hawkins, was headmaster of St John's Foundational School for the Sons of Poor Clergy (which soon moved to Leatherhead in Surrey and is now St John's School). Hope's mother, Jane Isabella Grahame, was an aunt of Kenneth Grahame, the author of Wind in the Willows. Hope was educated by his father and then attended Marlborough College, where he was editor of The Marlburian. He won a scholarship to Balliol College at Oxford University in 1881. Before graduating in 1886, he played football for his college, took a first-class degree in Classics, and was one of the rare Liberal presidents of the Oxford Union, becoming known as a good speaker. His contemporaries included Cosmo Gordon Lang, later Archbishop of Canterbury; A.E.W. Mason, author of The Four Feathers; Arthur Quiller-Couch, a literary critic; Gilbert Murray, a classical scholar and intellectual; Sir Michael Sadler, an historian and educationalist; and J. A. Spender, editor of the Westminster Gazette.

Hope trained as a lawyer and barrister, being called to the Bar by the Middle Temple in 1887. He had time to write, as his working day was not overly full during these first years, and he lived with his widowed father, then vicar of St Bride's Church, Fleet Street. Hope's short pieces appeared in periodicals, but for his first book he was forced to resort to a vanity press. A Man of Mark (1890) is notable primarily for its similarities to Zenda: it is set in an imaginary country, Aureataland, and features political upheaval and humour. More novels and short stories followed, including Father Stafford in 1891 and the mildly successful Mr Witt's Widow in 1892. He stood as a Liberal candidate for the Southern Division of South Bucks in the election of 1892 but was not elected. In 1893 he wrote three novels (Sport Royal, A Change of Air and Half-a-Hero) and a series of sketch that first appeared in the Westminster Gazette and were collected in 1894 as The Dolly Dialogues, illustrated by Arthur Rackham. Dolly was his first major literary success. A.E.W. Mason deemed these conversations "so truly set in the London of their day that the social historian would be unwise to neglect them" and said they were written with "delicate wit [and] a shade of sadness."

The idea for Hope's tale of political intrigue, The Prisoner of Zenda, being the history of three months in the life of an English gentleman, came to him at the close of 1893 as he was walking in London. Hope finished the first draft in a month, and the book was in print by April. The story is set in the fictional European kingdom of 'Ruritania', a term which has come to mean 'the novelist's and dramatist's locale for court romances in a modern setting.' Zenda achieved instant success, and its witty protagonist, the debonair Rudolf Rassendyll, became a well-known literary creation. The novel was praised by Mason, the literary critic Andrew Lang, and Robert Louis Stevenson. The popularity of Zenda convinced Hope to give up the "brilliant legal career [that] seemed to lie ahead of him" to become a full-time writer, but he "never again achieved such complete artistic success as in this one book." Also in 1894, Hope produced The God in the Car, a political story.

The sequel to Zenda, Rupert of Hentzau, begun in 1895 and serialised in the Pall Mall Magazine, did not appear between hard covers until 1898. A prequel entitled The Heart of Princess Osra, a collection of short stories set about 150 years before Zenda, appeared in 1896. Hope also co-wrote, with Edward Rose, the first stage adaptation of Zenda, which appeared on the London stage that year. Hope alone wrote the dramatic adaptation of Rupert of Hentzau in 1899.

Hope wrote 32 volumes of fiction over the course of his lifetime, and he had a large popular following. In 1896 he published The Chronicles of Count Antonio, followed in 1897 by a tale of adventure set on a Greek island, entitled Phroso. He went on a publicity tour of the United States in late 1897, during which he impressed a New York Times reporter as being somewhat like Rudolf Rassendyll: a well-dressed Englishman with a hearty laugh, a soldierly attitude, a dry sense of humour, "quiet, easy manners" and an air of shrewdness.

In 1898, he wrote Simon Dale, an historical novel involving the actress and courtesan Nell Gwyn. Marie Tempest appeared in the dramatisation, called English Nell. One of Hope's plays, The Adventure of Lady Ursula, was produced in 1898. This was followed by his novel The King's Mirror (1899), which Hope considered one of his best works. In 1900, he published Quisanté, and he was elected chairman of the committee of the Society of Authors. He wrote Tristram of Blent in 1901 and Double Harness in 1904, followed by A Servant of the Public in 1905, about the love of acting. In 1906, he produced Sophy of Kravonia, a novel in a similar vein to Zenda which was serialised in the Windsor Magazine; Roger Lancelyn Green is especially damning of this effort. In 1910, he wrote Second String, followed by Mrs Maxon Protests the next year.

In addition, Hope wrote or co-wrote many plays and some political non-fiction during the First World War, some under the auspices of the Ministry of Information. Later publications included Beaumaroy Home from the Wars, in 1919, and Lucinda in 1920. Lancelyn Green asserts that Hope was "a first-class amateur but only a second-class professional writer.

Hope married Elizabeth Somerville (1885/6—1946) in 1903, and they had two sons and a daughter. He was knighted in 1918 for his contribution to propaganda efforts during World War I. He published an autobiographical book, Memories and Notes, in 1927. Hope died of throat cancer at the age of 70 at his country home, Heath Farm at Walton-on-the-Hill in Surrey. There is a blue plaque on his house in Bedford Square, London.