Born in Texarkana, Arkansas in 1912, Nancarrow was active in his early years as a trumpeter, playing jazz and other types of popular music. He attended the Cincinnati College Conservatory of Music from 1929-32, and later studied composition and counterpoint in Boston with Nicolas Slonimsky, Walter Piston, and Roger Sessions (1933-36). He values most his work with Sessions: "The only formal studies I did that were important were the studies I had in strict counterpoint with Roger Sessions. That was the only formal training I ever had. And they were rigid! I'd do this strict counterpoint exercise, and then I'd take a piece of my music and say to him, 'What do you think of this?' 'Very interesting; where's your counterpoint exercise?'" Nancarrow also cites Bach and Stravinsky as seminal influences.

In 1937 Nancarrow enlisted in the Abraham Lincoln Brigade to fight against Franco in the Spanish Civil War. On his return to the United States in 1939 he became involved in the New York new music scene, contributing several reviews to Modern Music and associating with other composers such as Elliot Carter and Aaron Copland.

Nancarrow was a dedicated socialist, which made him politically unacceptable in the United States. This was brought plainly home when he applied for a passport and was denied. Angry at such treatment, he moved to Mexico City in the early 1940s, becoming a Mexican citizen in 1956. He died there in 1997.

Nancarrow returned to the player piano partly because of Mexico's extreme musical isolation. Another more compelling reason was his long-standing frustration at the inability of musicians to deal with even moderately difficult rhythms. He goes so far as to say that "As long as I've been writing music I've been dreaming of getting rid of the performers." With the advent of the phonograph, the player piano has been relegated to the status of an object of nostalgia. But not so for Nancarrow, who since the late 1940s has composed almost exclusively for the instrument.

The recipient of a MacArthur Fellowship, Nancarrow's complete Studies for Player Piano were released in 1990 on compact disc by Wergo (Germany), produced by Charles Amirkhanian. In 2008 Other Minds Records issued an updated version of the complete Studies for Player Piano, transferred from the 1750 Arch recordings of the late 1970s. These are the only available recordings utilizing Nancarrow’s original instruments: two 1927 Ampico player pianos, one with metal-covered felt hammers and the other with leather strips on the hammers.