William Edward Taylor Jr. was born on July 24, 1921, in Greenville, North Carolina, and was five when his family moved to Washington, D.C. His father was a dentist who sang and played piano, and an uncle who played ragtime and stride piano gave him his first records by Art Tatum and Fats Waller. He studied with Henry Grant, who had also taught Duke Ellington, and was paid a dollar for his first professional job at 13. After Dunbar High School he enrolled at Virginia State College as a sociology major, switched to music at the urging of the pianist Undine Smith Moore, and graduated with a music degree in 1942.

Taylor moved to New York City and began working as a pianist in 1944, first in Ben Webster's quartet on 52nd Street. The night he joined Webster he met Tatum, who became his mentor. Over the next few years he worked with the violinists Eddie South and Stuff Smith (he recorded with Smith in 1944), the bassist Slam Stewart, and Machito's mambo band, which gave him a lasting taste for Latin rhythms. He then spent eight months on a European tour with the Don Redman Orchestra and stayed on with his wife, Theodora, in Paris and the Netherlands. Back in New York he worked at the Royal Roost with Bob Wyatt and the singer Sylvia Syms, and with Billie Holiday in a show called Holiday on Broadway. In 1949 he published a textbook on bebop piano styles. He became the house pianist at Birdland, where he played alongside Charlie Parker, J.J. Johnson, Stan Getz, Dizzy Gillespie, and Miles Davis, and he stayed longer than any other pianist in the club's history.

His first trio record, for Atlantic, was made in New York on February 20, 1951, with the bassist Al McKibbon and the drummer Shadow Wilson, and from 1952 he worked mainly as a trio leader. For Prestige he recorded the Latin-tinged sessions collected on Cross Section and a date with the conga player Candido Camero (September 7, 1954), and on December 17, 1954, he gave a concert at Town Hall. In 1956 he moved to ABC-Paramount, where his trio with the bassist Earl May and the drummer Percy Brice made Evergreens and At the London House; with Ed Thigpen on drums he then recorded My Fair Lady Loves Jazz (1957), a Lerner and Loewe set for trio and horns arranged and conducted by Quincy Jones. Taylor Made Jazz (recorded in Chicago on November 17, 1957) paired him with members of Ellington's orchestra, and Billy Taylor with Four Flutes (July 1959) put Frank Wess, Herbie Mann, and other flutists in front of his rhythm section. The trio was a regular feature at the Hickory House on West 55th Street in the 1960s. On November 12, 1963, he recorded "I Wish I Knew How It Would Feel to Be Free," a tune he wrote for his daughter Kim, for the Capitol album Right Here, Right Now!. Lyrics by Dick Dallas were added later, and Nina Simone recorded the song on Silk & Soul (1967). Taylor's own live version, from his 1968 Tower album of the same name, became the theme of the BBC review programme Film.... The piece is widely regarded as an unofficial anthem of the civil rights movement.

Taylor's public work for jazz ran alongside his playing. In 1958 he was musical director of The Subject Is Jazz, an NBC series hosted by Gilbert Seldes whose guests included Duke Ellington, Bill Evans, and Cannonball Adderley. In the 1960s he worked as a disc jockey and program director at the New York station WLIB, and in 1964 he helped found Jazzmobile, the Harlem outreach program that took free concerts and jazz classes into New York neighborhoods. From 1969 to 1972 he led the band on The David Frost Show, the first African American to lead a talk-show band; players who appeared with it included Louis Armstrong, Count Basie, Benny Goodman, and Buddy Rich. He earned a doctorate in music education at the University of Massachusetts Amherst in 1975, hosted NPR's Jazz Alive! from 1977 to 1983, and from 1981 was a regular correspondent for CBS News Sunday Morning, conducting more than 250 interviews with musicians and winning an Emmy for a segment on Quincy Jones. He taught at Howard University, Long Island University, the Manhattan School of Music, Yale, and the University of Massachusetts Amherst, and later held a distinguished professorship at East Carolina University.

In 1989 he started his own label, Taylor-Made, which issued You Tempt Me (a 1985 trio date with the bassist Victor Gaskin and the drummer Curtis Boyd), Solo, and White Nights and Jazz in Leningrad, a live set with Gaskin and the drummer Bobby Thomas. In the 1990s he recorded for GRP, including Dr. T (1993) with Gerry Mulligan, It's a Matter of Pride (1994), and Homage (1995). In 1994 he became artistic director for jazz at the John F. Kennedy Center for the Performing Arts in Washington, D.C., where he created the Louis Armstrong Legacy series and the annual Mary Lou Williams Women in Jazz Festival, and from 1995 to 2001 he hosted the NPR series Billy Taylor's Jazz at the Kennedy Center. A stroke in 2002 affected his right hand, but he kept performing until close to the end of his life. He passed away in Manhattan on December 28, 2010, at 89, after a heart attack. A Harlem memorial service on January 11, 2011, featured his final working trio of the bassist Chip Jackson and the drummer Winard Harper, along with Geri Allen and Cassandra Wilson. He was survived by his wife of 65 years, Theodora, and a daughter, Kim Taylor-Thompson; their son, the artist Duane Taylor, died in 1988.

Taylor was named an NEA Jazz Master in 1988 and received the National Medal of Arts in 1992, the Tiffany Award in 1991, two Peabody Awards for his broadcast and Jazzmobile work, a Down Beat lifetime achievement award in 1984, and a Grammy Award in 2004. He held more than 20 honorary doctorates, performed at the White House seven times, and was inducted into the North Carolina Music Hall of Fame in 2010.

Taylor played in a clear, swinging, bop-based style that drew on stride and on the harmonic and technical command of Art Tatum, and he added Latin rhythms to it after his years around Machito and Candido Camero. AllMusic's Scott Yanow calls him a flexible rather than innovative pianist who could move among swing, bop, and more modern styles while keeping a recognizable musical personality. Several of his records are built around a single idea, whether a Broadway score, an Ellington-flavored horn section, or a flute choir. As a composer he wrote more than 300 pieces, and "I Wish I Knew How It Would Feel to Be Free" is by far the best known. He said in a 2007 interview that being an advocate eclipsed his reputation as a musician, and that this was his own doing, because he wanted to prove that jazz had an audience. The critic Leonard Feather once called him the foremost spokesman for jazz. His influence runs mainly through teaching and broadcasting: the saxophonist Najee, for one, came up through Jazzmobile, and the Kennedy Center programs Taylor built carried his approach into the next generation.