Hayden was born Asa Bundy Sheffey in Detroit, Michigan to Ruth and Asa Sheffey (who separated before his birth). He was taken in by a foster family next door, Sue Ellen Westerfield and William Hayden, and grew up in a Detroit ghetto nicknamed "Paradise Valley". The Haydens' perpetually contentious marriage, coupled with Ruth Sheffey’s competition for young Hayden's affections, made for a traumatic childhood.Witnessing fights and suffering beatings, Hayden lived in a house fraught with chronic angers whose effects would stay with the poet throughout his adulthood. On top of that, his severe visual problems prevented him from participating in activities such as sports in which nearly everyone was involved. His childhood traumas resulted in debilitating bouts of depression which he later called "my dark nights of the soul."

Because he was nearsighted and slight of stature, he was often ostracized by his peer group. As a response both to his household and peers, Hayden read voraciously, developing both an ear and an eye for transformative qualities in literature. He attended Detroit City College (Wayne State University), and left in 1936 to work for the Federal Writers' Project, where he researched black history and folk culture.

He was raised as a Baptist, but converted to the Bahá'í Faith during the early 1940s after marrying a Bahá'í, Erma Inez Morris. He is one of the best-known Bahá'í poets and his religion influenced much of his work.

After leaving the Federal Writers' Project in 1938, marrying Erma Morris in 1940, and publishing his first volume, Heart-Shape in the Dust (1940), Hayden enrolled at the University of Michigan in 1941 and won a Hopwood Award there.

In pursuit of a master's degree, Hayden studied under W. H. Auden, who directed Hayden's attention to issues of poetic form, technique, and artistic discipline, and influence may be seen in the "technical pith of Hayden'sverse". After finishing his degree in 1942, then teaching several years at Michigan, Hayden went to Fisk University in 1946, where he remained for twenty-three years, returning to Michigan in 1969 to complete his teaching career.

He died in Ann Arbor, Michigan in 1980, age 66.

Hayden was elected to the American Academy of Poets in 1975. From 1976 - 1978, Hayden was Consultant in Poetry to the Library of Congress, the position which in 1985 became the Poet Laureate Consultant in Poetry to the Library of Congress. Hayden's most famous and most anthologized poem is Those Winter Sundays, which deals with the memory of fatherly love and loneliness.

Other famed poems include The Whipping (which is about a small boy being severely punished for some undetermined offense), Middle Passage (inspired by the events surrounding the United States v. The Amistad affair), Runagate, Runagate, and Frederick Douglass.

Hayden’s influences included Wylie, Cullen, Dunbar, Hughes, Bontemps, Keats, Auden and Yeats. Hayden’s work often addressed the plight of African Americans, usually using his former home of Paradise Valley slum as a backdrop, as he does in the poem Heart-Shape in the Dust. Hayden’s work made ready use of black vernacular and folk speech. Hayden wrote political poetry as well, including a sequence on the Vietnam War.

On the first poem of the sequence, he said, “I was trying to convey the idea that the horrors of the war became a kind of presence, and they were with you in the most personal and intimate activity, having your meals and so on. Everything was touched by the horror and the brutality and criminality of war. I feel that's one of the best of the poems.”