Fry was born in Hampstead, London, the son of Alan Fry, a British scientist, and Marianne Neumann, an Austrian of Jewish descent. He has an elder brother, Roger, and a younger sister, Joanna. He grew up in the village of Booton near Reepham, Norfolk, having moved to the countryside when very young.

Fry briefly attended Gresham's School, Holt, before going on to Stout's Hill Preparatory School, Uppingham School, Rutland, where he joined Fircroft house. He was expelled from Uppingham when he was fourteen, and subsequently from the Paston School. At seventeen, following his failure at Norfolk College of Arts and Technology, Fry absconded with a credit card stolen from a family friend, and as a result spent three months in Pucklechurch Prison on grounds of fraud. Following his release he resumed education at Norwich City College, promising administrators that he would study rigorously to sit the Cambridge Entrance Exams. He passed well enough to gain a scholarship before going on to Queens' College, Cambridge.

At Cambridge, Fry gained a 2:1 in English literature. He joined the Cambridge Footlights, where he met his longstanding friend and collaborator, Hugh Laurie. Fry also appeared on University Challenge.

Fry came to the attention of the public in the mid-1980s with appearances on Saturday Live alongside Hugh Laurie. Involvement in the programme led to his casting as Lord Melchett in Blackadder II, the 1986 series of the popular BBC sitcom co-written by Saturday Live host Ben Elton. His cameo as the Duke of Wellington in the following year's series, Blackadder the Third, led to the development of character General Melchett, with whom Fry would make a career-defining performance in the 1989 series Blackadder Goes Forth.

In 1987, whilst starring in Blackadder the Third, Fry made the first series of comedy sketch show A Bit of Fry and Laurie with his long-time comedy partner. Their elaborate and eclectic mix of word-play and innuendo was greatly successful, running for 26 episodes spanning four series. In 1988 Fry became a regular contestant on popular improvisational comedy programme Whose Line Is It Anyway?, as well as featuring in his own six-part BBC Radio 4 series, Saturday Night Fry.

Fry has often expressed great admiration for three authors in particular: Anthony Buckeridge, his friend Douglas Adams, and P.G. Wodehouse, all of whom have strongly influenced his writing. Appropriately, he has appeared in dramatic adaptations of all three men's works: as Jeeves (alongside Hugh Laurie's Bertie Wooster) in the Granada television adaptations of Wodehouse's novels and short stories; as the voice of The Guide in the film adaptation of Adams' novel The Hitchhiker's Guide to the Galaxy; and as the narrator in a BBC radio reading of Buckeridge's Jennings stories. He has also been a fan of Oscar Wilde since he was 13, finding Wilde to be someone with whom he could "fiercely and proudly identify". Fry portrayed Wilde in the 1997 biographical film, fulfilling to critical acclaim a role that he has said that he was "born to play".

Having recorded all six stories currently in print, Fry is well-known in the United Kingdom as the voice of the Harry Potter series of audiobooks. He is one of just five people worldwide to know the ending of the yet unpublished Harry Potter and the Deathly Hallows, his recording of which is due to be released later this year on the same day as the book's paperback edition.

Fry is a devoted fan of Vivian Stanshall, about whom he wrote a long tribute in his autobiography, Moab Is My Washpot. Fry appeared as Stanshall in the first few 2006 "reunion" gigs of the Bonzo Dog Band. Since Fry, other British comedians, including Ade Edmonson, have tried their hand at "being Vivian".

Fry has been the host of the question and answer programme QI since its inception in 2003. The show, in which guests are rewarded for being "Quite Interesting" rather than correctly answering questions, features regular contestants Alan Davies, Rich Hall, Bill Bailey, Phill Jupitus, and Jo Brand. He won the 2006 Rose d'Or award for Best Game Show Host for his work on the series. He has also been a regular host of the BAFTA Film Awards. However, in 2006, Fry stepped down as host, noting that "It has been a tremendous six years, and I look forward to watching it without nerves in the future."

Recently, Fry has taken up a recurring guest role as a psychiatrist in the popular American Fox TV drama Bones. He also voices or appears in numerous television advertisements in the UK, such as Twinings tea. Fry also narrates the award-winning animated programmes Pocoyo and The Transporters, the latter being part of an autism research initiative supported by the University of Cambridge.

The publication of his bestselling non-fiction book The Ode Less Travelled: Unlocking The Poet Within has closely associated Fry with poetry. Following the death of John Timpson in early 2006, Fry became the patron of Norfolk-based literature group Centre Poets.

In 2007, he interviewed Tony Blair, Prime Minister of the United Kingdom, as part of a series of podcasts available from the 10 Downing Street website. They discussed British social and cultural changes since the general election of 1997, at which Blair's Labour Party was voted into government.

Fry struggled to keep his homosexuality secret during his teenage years at public school, and practised a celibate lifestyle for 16 years. He once jokingly commented, "I suppose it all began when I came out of the womb. I looked back up at my mother and thought to myself, 'That's the last time I'm going up one of those.'" (Fry later admitted in his autobiography, Moab Is My Washpot, that he "borrowed" the line from a friend at university). Fry currently lives in London with his long-time partner, Daniel Cohen. He also has a second home in West Bilney near King's Lynn, Norfolk.

He met Cohen following his highly publicised nervous breakdown in 1995, which was attributed at the time to bad reviews of Fry's performance in Cell Mates, a West End play. Fry was also suffering from serious clinical depression at the time as a result of his as-yet undiagnosed cyclothymia, a form of bipolar disorder. He subsequently walked out of the production, prompting its early closure and incurring the displeasure of his co-star, Rik Mayall, as well as the wrath of playwright Simon Gray. Fry subsequently was missing for several days, during which period he contemplated suicide. He abandoned the idea and fled from the United Kingdom by ferry, eventually resurfacing in Belgium.

Fry has spoken publicly about the experience of living with a form of bipolar disorder and has made and presented a documentary about the condition and his personal experience thereof, Stephen Fry: The Secret Life of the Manic-Depressive. As part of the documentary he interviewed sufferers of the illness including celebrities Carrie Fisher, Richard Dreyfuss, and Tony Slattery. Also interviewed were chef Rick Stein, whose father committed suicide, Robbie Williams, who talks of his experience with unipolar depression, and comedienne Jo Brand, who previously worked as a psychiatric nurse. The two-part series was broadcast on BBC Two in September 2006 and repeated in March 2007 as part of the BBC's programming in aid of Comic Relief.

Fry was an active supporter of the British Labour Party for many years, and appeared in a party political broadcast on its behalf with Hugh Laurie and Michelle Collins in November 1993. Despite this, he did not vote in the 2005 General Election because of the stance of both the Labour and Conservative parties with respect to the Iraq War. Despite his praising of the current government for social reform with regard to homosexuality, Fry has been critical of the British Prime Minister and the Labour Party's "Third Way" concept. He is on cordial terms with Prince Charles (despite satirising him heavily as King Charles I in the comedy programme Blackadder: The Cavalier Years), through his work with the Prince's Trust. He attended the wedding of the Prince of Wales to Camilla Parker-Bowles in 2005.

Fry is a friend of British comedian and actor Rowan Atkinson and was best man at Atkinson's wedding to Sunetra Sastry at The Russian Tea Room in New York City. He was also a friend of British actor John Mills , and is godfather to all three of Hugh Laurie's children.

A great fan of cricket, he was recently interviewed for the "Ashes Fever" DVD, reporting on England's victory against Australia in the 2005 Ashes series.

In a 2005 poll to find The Comedian's Comedian, Fry was voted amongst the top 50 comedy acts ever by fellow comedians and business insiders, and, in September 2006, number 9 in a poll of TV's Greatest Stars as voted for by the general public. In December 2006 he was ranked 6th for the BBC's Top Living Icon Award, was featured on The Culture Show, and was voted most intelligent man on television by readers of Radio Times. He was once described as a "man with a brain the size of Kent" in an interview with Michael Parkinson.

23rd on the previous year's list, the Independent on Sunday Pink List named Fry the second most influential gay person in Britain in May 2007.[10] Later the same month he was announced as the 2007 BT Mind Champion of the Year[11] in recognition of the awareness raised by his documentary on bipolar disorder, and was nominated for Best Entertainment Performance (QI) and Best Factual Series (Secret Life of the Manic Depressive) at the 2007 British Academy Television Awards.