Charles Walter Stansby Williams was born in London on September 20, 1886, the son of Richard and Mary Williams of Islington. He was educated at Saint Albans School, Hertfordshire, and received a scholarship to University College London, but was unable to complete his studies there because his family lacked the financial resources. He began work in a Methodist bookroom in 1904 and was hired by Oxford University Press as an assistant proofreader in 1908 and soon rose to the position of editor. He married Florence Conway in 1917 and continued to work at Oxford University Press until his death on May 15, 1945. One of his greatest editorial achievements Oxford University Press was the first major edition in English of the works of Søren Kierkegaard.

In addition to his work as a novelist, Williams also published works of literary criticism, history, biography, theology, drama, and many book reviews. His best known novels include War in Heaven (1930), Descent into Hell (1937), and All Hallows' Eve (1945). T. S. Eliot wrote an introduction for the last of these and described Williams’s novels as "supernatural thrillers" because they explore the intersection of the physical with the spiritual while also examining the ways in which power, even spiritual power, can corrupt as well as sanctify.

Unlike those of J. R. R. Tolkien and most of those of C. S. Lewis, all of Williams’ fantasies are set in the contemporary world. W. H. Auden was one of Williams’ greatest admirers and reportedly re-read Williams’s extraordinary and highly unconventional history of the church, Descent of the Dove (1939), every year. Williams’s highly regarded study of Dante entitled The Figure of Beatrice (1944) continues to be consulted by Dante scholars today. Williams considered his most important work to be his two books of poetry, of which two books were published, Taliessin through Logres (1938) and The Region of the Summer Stars (1944).

Although Williams was admired by of some of the most notable writers of his day, including T. S. Eliot and W. H. Auden, one of his greatest admirers was C. S. Lewis, whose novel That Hideous Strength was at the time regarded as entirely inspired by Williams's novels. The admiration was reciprocated and the two maintained an enduring and fruitful friendship. During World War II, Oxford University Press moved from London to Oxford, allowing Williams to participate regularly in Lewis’s literary society known as the Inklings.

In this setting Williams was able to work on his final published novel, All Hallows' Eve, and hear Tolkien read some of his early drafts of The Lord of the Rings aloud to the group. During this time Williams also gave lectures at Oxford on John Milton and received an honorary M.A. degree. He is buried in Holywell Cemetery, Oxford. His headstone bears the word "poet."