Crystal was born in Lisburn, Northern Ireland. He grew up in Holyhead, North Wales, and Liverpool, England where he attended St Mary's College from 1951.

Crystal studied English at University College London between 1959 and 1962. He was a researcher under Randolph Quirk between 1962 and 1963, working on the Survey of English Usage. Since then he has lectured at Bangor University and the University of Reading. He is currently an honorary professor of linguistics at Bangor. His many academic interests include English language learning and teaching, clinical linguistics, forensic linguistics, language death, "ludic linguistics" (Crystal's neologism for the study of language play), English style, Shakespeare, indexing, and lexicography. He is the Patron of the International Association of Teachers of English as a Foreign Language (IATEFL) and has also served as an important editor for Cambridge University Press.

David Crystal lives in Holyhead with his wife. He has four grown-up children. His son Ben Crystal is also an author and co-authored two books with his father. Retired from full-time academia, he works as a writer, editor and consultant. Crystal was awarded the OBE in 1995 and became a Fellow of the British Academy in 2000. He is also a Founding Fellow of the Learned Society of Wales.

Crystal is the author, co-author, or editor of over 100 books on a wide variety of subjects, specialising among other things in editing reference works, including (as author) the Cambridge Encyclopedia of Language (1987, 1997, 2010) and the Cambridge Encyclopedia of the English Language (1995, 2003), and (as editor) the Cambridge Biographical Dictionary, the Cambridge Factfinder, the Cambridge Encyclopedia, and the New Penguin Encyclopedia (2003). He has also edited literary works, and is Patron of the UK National Literacy Association. He has also published several books for the general reader about linguistics and the English language, which use varied graphics and short essays to communicate technical material in an accessible manner.

Crystal hypothesises that globally English will both split and converge, with local variants becoming less mutually comprehensible and therefore necessitating the rise of what he terms World Standard Spoken English (see also International English). In his 2004 book The Stories of English, a general history of the English language, he describes the value he sees in linguistic diversity and the according of respect to varieties of English generally considered "non-standard". He is a proponent of a new field of study, Internet linguistics.

His non-linguistic writing includes poems, plays and biography. A Roman Catholic by conviction, he has also written devotional poetry and articles.

From 2001 to 2006, Crystal served as the Chairman of Crystal Reference Systems Limited, a provider of reference content and Internet search and advertising technology. The company's iSense and Sitescreen products are based upon the patented Global Data Model, a complex semantic network that Crystal devised in the early 1980s and was adapted for use on the Internet in the mid 1990s. The iSense technology is the subject of patents in the United Kingdom and the United States. After the company's acquisition by Ad Pepper Media N.V., he remained on the board as its R&D director until 2009, and continues to act as a consultant for Ad Pepper.

Crystal was influential in a campaign to save Holyhead's convent from demolition, leading to the creation of the Ucheldre Centre. Crystal continues to write as well as contribute to television and radio broadcasts. His association with the BBC ranges from, formerly, a BBC Radio 4 series on language issues to, currently, podcasts on the BBC World Service website for people learning English.

His book The Gr8 Db8 (published in 2008) focused on text language and its impact on society. In 2009 Routledge published his autobiographical memoir Just a Phrase I'm Going Through: My Life in Language, which was released simultaneously with a DVD of three of his lectures.

As an expert on the evolution of the English language, he was involved in the production of Shakespeare at Shakespeare's Globe in 2004 and 2005 in the "Original Pronunciation" of the period in which he was writing. He coached the actors on the appropriate pronunciation for the period.