Grace is born on May 10, 1832 in Ireland in Riverstown near the Cove of Cork to James Grace and Eleanor May Russell (née Ellen) while the family is away from home. He is raised on Grace property at Ballylinan in Queens County, now County Laois, near the town of Athy. He is a member of a prominent and well-to-do family. In 1846, he sails for New York against the wishes of his father, and works as a printer’s devil and a shoemaker’s helper before returning to Ireland in 1848.
His nephew, Cecil Grace, attempts a crossing of the English Channel in December 1910 in an airplane, flying from Dover to Calais. However, in coming back he becomes disoriented and over Dover flies northeast over the Goodwin Sands toward the North Sea and is lost.
Grace and his father travel to Callao, Peru, in 1851, seeking to establish an Irish agricultural community. While his father returns home, William remains and begins work with the firm of John Bryce and Co., as a ship chandler. In 1854, the company is renamed Bryce, Grace & Company, in 1865, to Grace Brothers & Co., and ultimately to W. R. Grace and Company.
On September 11, 1859, Grace is married to Lillius Gilchrist, the daughter of George W. Gilchrist, a prominent ship builder of Thomaston, Maine, and Mary Jane (née Smalley) Gilchrest. Together, they have eleven children.
Opposing the famous Tammany Hall, Grace is elected as the first Irish American Catholic mayor of New York City in 1880. He conducts a reform administration attacking police scandals, patronage and organized vice, reduces the tax rate, and breaks up the Louisiana State Lottery Company. Defeated in the following election, he is re-elected in 1884 on an Independent ticket but loses again at the following election. During his second term, he receives the Statue of Liberty as a gift from France.
Grace is a renowned philanthropist and humanitarian, at one point contributing a quarter of the aid delivered to Ireland aboard the steamship Constellation during the Irish Famine of 1879. In 1897, he and his brother, Michael, found the Grace Institute for the education of women, especially immigrants.
William R. Grace dies on March 21, 1904 at his residence, 31 East 79th Street, in New York City. His funeral is held at St. Francis Xavier Church on West 16th Street and he is buried at the Holy Cross Cemetery in Brooklyn. At the time of his death his estate is valued at $25,000,000.