Sowell was born in segregated Gastonia, North Carolina, to a poor family, and grew up in Harlem, New York City.
Due to poverty and difficulties at home, he dropped out of Stuyvesant High School and worked various odd jobs, eventually serving in the United States Marine Corps during the Korean War.
Afterward he took night classes at Howard University and then attended Harvard University, where he graduated magna cum laude in 1958.
He earned a master's degree in economics from Columbia University the next year and a doctorate in economics from the University of Chicago in 1968.
In his academic career, he has served on the faculties of Cornell University, Amherst College, Brandeis University, the University of California, Los Angeles, and, currently, Stanford University.
He has also worked at think tanks including the Urban Institute.
Since 1977, he has worked at the Hoover Institution at Stanford University, where he is the Rose and Milton Friedman Senior Fellow on Public Policy.