Jackson was born Jesse Louis Burns in Greenville, South Carolina, to Helen Burns, a 16-year-old single mother. His biological father, Noah Louis Robinson, a former professional boxer and a prominent figure in the community, was married to another woman when Jesse was born. He was not involved in his son's life. In 1943, two years after Jesse's birth, his mother married Charles Henry Jackson, who would adopt Jesse 14 years later. Jesse went on to take the surname of his stepfather.

Jackson attended Sterling High School, a segregated high school in Greenville, where he was a student-athlete. Upon graduating in 1959, he rejected a contract from a professional baseball team so that he could attend the racially integrated University of Illinois on a football scholarship. One year later, Jackson transferred to North Carolina A&T located in Greensboro, North Carolina. There are differing accounts for the reasons behind this transfer. Jackson claims that the change was based on the school's racial biases which included his being unable to play as a quarterback despite being a star quarterback at his high school. ESPN.com suggests that claims of racial discrimination on the football team may be exaggerated because Illinois's starting quarterback that year was an African American, although it does not mention factors besides the quarterback's race which may have contributed to this perception (such as team dynamics or interpersonal interactions with other players on the team). Jackson also mentions being demoted by his speech professor as an alternate in a public-speaking competition team despite the support of his teammates who elected him a place on the team for his superior abilities. Jackson left Illinois at the end of his second semester after being placed on academic probation. Following his graduation from A&T, Jackson attended the Chicago Theological Seminary with the intent of becoming a minister, but dropped out in 1966 to focus full time on the civil rights movement. He was ordained in 1968, without a theological degree; awarded an honorary theological doctorate from Chicago in 1990; and received his Master of Divinity Degree based on his previous credits earned, plus his life experience and subsequent work, in 2000.

Jackson married Jacqueline Lavinia Brown (born 1944) on, December 31, 1962, and they had five children: Santita (1963), Jesse Jr. (1965), Jonathan Luther (1966), Yusef DuBois (1970), and Jacqueline Lavinia (1975).

In 2001, it was revealed Jackson had an affair with a staffer, Karin Stanford, that resulted in the birth of a daughter, Ashley, in May 1999. According to CNN, in August 1999, The Rainbow Push Coalition had paid Stanford $15,000 in moving expenses and $21,000 in payment for contracting work. A promised advance of an additional $40,000 against future contracting work was rescinded once the affair became public. This incident prompted Jackson to withdraw from activism for a short time. Separate from the 1999 Rainbow Coalition payments, Jackson pays $4,000 a month in child support.

In 1965, he participated in the Selma to Montgomery marches organized by James Bevel, Dr. Martin Luther King, Jr., and other civil rights leaders in Alabama. When Jackson returned from Selma, he threw himself into SCLC's effort to establish a beachhead of the Southern Christian Leadership Conference (SCLC) in Chicago.

In 1966, King and Bevel selected Jackson to be head of the SCLC’s Operation Breadbasket in Chicago, and SCLC promoted him to be the national director in 1967. Following the example of Reverend Leon Sullivan of Philadelphia, a key goal of the new group was to foster “selective buying” (boycotts) as a means to pressure white businesses to hire blacks and purchase goods and services from black contractors. One of Sullivan's precursors was Dr. T.R.M. Howard, a wealthy South Side doctor and entrepreneur and key financial contributor to Operation Breadbasket. Before he moved to Chicago from Mississippi in 1956, Howard, as the head of the Regional Council of Negro Leadership, had successfully organized a boycott against service stations that refused to provide restrooms for blacks.

When King was assassinated on April 4, 1968, in Memphis, Tennessee, the day after his famous "I’ve been to the mountaintop" speech at the Mason Temple, Jackson was in the parking lot one floor below. Jackson's appearance on NBC's Today Show, wearing the same blood-stained turtleneck that he had worn the day before, drew criticism from several King aides; some King associates also dispute Jackson's description of his personal involvement and also of the sequence of events surrounding the assassination.

Jackson has been known for commanding public attention since he first started working for King in 1966. His primary goal for this attention has been to give blacks a sense of self-worth.

Beginning in 1968, Jackson increasingly clashed with Ralph Abernathy, King's successor as chairman of SCLC. In December, 1971, they had a complete falling out. Abernathy suspended Jackson for “administrative improprieties and repeated acts of violation of organizational policy.” Jackson resigned, called together his allies, and Operation PUSH was born during the same month. The new group was organized in the home of Dr. T.R.M. Howard who also became a member of the board of directors and chair of the finance committee.

In 1984, Jackson organized the Rainbow Coalition, which later merged, in 1996, with Operation PUSH. The newly formed Rainbow PUSH organization brought his role as an important and effective organizer to the mainstream. Al Sharpton also left the SCLC in protest to follow Jackson and formed the National Youth Movement.