Born in Chicago, Illinois, Olson grew up in northern Wisconsin where he developed his life-long interest in the outdoors. In June 1921, Olson took his first canoe trip where he fell in love with the canoe country wilderness of northern Minnesota that would become the Boundary Waters Canoe Area Wilderness (with his help). In August of that year, Olson married Elizabeth Dorothy Uhrenholdt, and the two spent their honeymoon on another canoe trip in the Boundary Waters. He worked as a canoe guide for J.C. Russell's outfitters on Fall Lake in Winton, Minnesota, before purchasing the business in 1929.

After studying agriculture, botany, geology, and ecology at Northland College, the University of Wisconsin—Madison, and the University of Illinois, Olson moved to Ely, Minnesota to teach biology at Ely Junior College (now Vermilion Community College). He later chaired the science department and served as dean. He spent most of his life in the Ely area, working as a canoe guide during the summer months, teaching, and writing about the natural history, ecology, and outdoor life in and around the Boundary Waters.

On August 27, 1971, a little over a year after the celebration of the first Earth Day, Northland College hosted its first environmental conference. Among those invited to address the two-day conference were Senator Gaylord Nelson and Sigurd Olson. The conference became "the instrument of origin of the Sigurd Olson Environmental Institute," as Robert Matteson, the founder of the Institute, wrote. With energy to move in a new and exciting direction, and guided by the philosophies of Sigurd Olson, the Institute opened its doors in spring of 1972, embarking on more than 30 years of serving Northland College and the Lake Superior region.

In 1974, Olson earned the John Burroughs Medal, the highest honor in nature writing. He died in 1982 of a heart attack while snowshoeing near his home.

Olson was influential in the protection of the Boundary Waters and helped draft the Wilderness Act of 1964, becoming president of The Wilderness Society from 1963 to 1971. He also helped establish Voyageurs National Park in northern Minnesota, Alaska's Arctic National Wildlife Refuge, and Point Reyes National Seashore in California. Sigurd also was a consultant to the Secretary of the Interior Steward Udall on wilderness and national park issues.

After over 50 years of hard work, Sigurd reached his goal. Full wilderness status was granted to the Boundary Waters Canoe Area Wilderness by Jimmy Carter in 1978, four years before Sigurd died. His hard work was commemorated in many different ways, including in the naming of a central building of YMCA Camp Widjiwagan, located on nearby Burntside Lake.

Olson was President of the National Parks Association and a member of its Board of Trustees.