Powys was born in Shirley, Derbyshire, where his father was vicar. His mother was descended from the poet William Cowper, hence his middle name. His two younger brothers, Llewelyn Powys and Theodore Francis Powys, also became well-known writers. Other brothers and sisters also became prominent in the arts.
John studied at Sherborne School and Corpus Christi College, Cambridge, and became a teacher and lecturer; as lecturer, he worked first in England, then in continental Europe and finally in the USA, where he lived in the years 1904-1934. While in the United States, his work was championed by author Theodore Dreiser. He engaged in public debate with Bertrand Russell and the philosopher and historian Will Durant: he was called for the defence in the first obscenity trial for the James Joyce novel, Ulysses, and was mentioned with approval in the autobiography of US feminist and anarchist, Emma Goldman.
He made his name as a poet and essayist, moving on to produce a series of acclaimed novels distinguished by their uniquely detailed and intensely sensual recreation of time, place and character. They also describe heightened states of awareness resulting from mystic revelation, or from the experience of extreme pleasure or pain. The best known of these distinctive novels are A Glastonbury Romance and Wolf Solent. He also wrote some works of philosophy and literary criticism, including a pioneering tribute to Dorothy Richardson.
Having returned to the UK, he lived in England for a brief time, then moved to Corwen in Wales, where he wrote historical romances (including two set in Wales) and magical fantasies. He later moved to Blaenau Ffestiniog, where he remained until his death in 1963.