Born in Irvine, Ayrshire, Galt was the son of a naval captain. When his family relocated to Malden in 1789, Galt became an apprentice and junior clerk, writing essays and stories for local journals in his spare time. He moved to London in 1804 to seek his fortune. In 1809, Galt began studying law at Lincoln's Inn.
While subsequently traveling in Europe, Galt met and befriended Lord Byron. On his return to London, Galt wrote an account of his travels, which met with moderate success. Decades later, he would also publish the first full biography of Lord Byron.
In 1813, Galt attempted to establish a Gibraltan trading company, in order to circumvent Napoleon's embargo on British trade; however, Wellington's victory in Spain made this no longer necessary. Galt then returned to London and married Elizabeth Tilloch. In 1815, he became Secretary of the Royal Caledonian Asylum in London. He also privately consulted in several business ventures.
Concentrating on his writing for the next several years, Galt lived at times in London, Glasgow, Edinburgh and elsewhere. In addition to fiction, he also wrote a number of school texts under the pseudonym Reverend T. Clark. In addition to moving his residence frequently during this period, Galt also switched publishers several times, moving from Blackwood's Magazine to Oliver and Boyd and then back again.
In 1824, Galt was appointed Secretary to the Canada Company, a charter company established to aid in the colonization of Upper Canada. While in Canada, Galt lived in Ontario, where he founded the town of Guelph in 1827. The town of Galt in Ontario is named after him. His three sons played prominent roles in Canadian politics, one of them eventually becoming a minister of Finance.
In 1829, Galt ran afoul with Sir Peregrine Maitland, the Lieutenant Governor of Ontario, who removed Galt from his post and imprisoned him in the King's Bench Prison on a charge of negligence. Although the charges were possibly groundless, Galt was nevertheless incarcerated for a few months; one of Galt's last novels, The Member, has political corruption as its central theme. He retired to Greenock, publishing his two-volume Autobiography in 1833.
Galt's novels are best known for their depiction of Scottish rural life, tinged with ironic humour. Galt wrote the following works: