Graham Taylor was born in Schenectady, New York on May 2, 1851, into the fifth generation of a family of Dutch-reformed ministers. Taylor had no doubts as a youth about his chosen career. After graduating from Rutgers College, he entered the Theological Seminary of the Reformed Church in America in New Brunswick, New Jersey, in 1870. Three years later, he accepted the pastorate of a small church in Hopewell, New York, where he stayed for seven years. In 1880 he moved to Hartford, Connecticut, to be the pastor of the Fourth Congregational Church. It was there that Taylor first experienced working with the poor and immigrant communities, and where he saw firsthand the effects of vice (alcoholism, prostitution, etc.) on society. His experiences led him further and further away from the conservative Dutch-Reformed theology to a more liberal social gospel theology and outlook. Therefore, when he was invited to move to Chicago to teach at the Chicago Theological Seminary (where he was given unrestricted liberty to develop his own courses of teaching), he was more than pleased to accept the offer.

Taylor moved himself and his family to Chicago in 1892. He began to explore the idea of starting a settlement house akin to Jane Addams' Hull House, and in 1894 the Chicago Commons Settlement was founded. The house was located at the corner of Union Street and Milwaukee Avenue, in Chicago's 17th Ward. The neighborhood was working class, with large populations of Scandinavian, Irish, German, and Italian immigrants. Although Taylor brought in his Seminary students as residents and teachers in the Commons, he wanted the house to be non-sectarian, open to all faiths, economic levels, and ethnic groups. Soon it became apparent that the current building was not sufficient for the growing needs of the Commons, and between 1900-1901, a new Commons building was constructed on the corner of Grand and Morgan Streets, where the old Tabernacle Congregational Church had stood.

In addition to teaching Seminary students in working with the poor and starting kindergarten classes at the Commons, Taylor also was interested in expanding coursework into a new school, and in 1908 the Commons Association sponsored the first classes in the Chicago School of Civics and Philanthropy, which in 1920 was incorporated into the University of Chicago as the Graduate School of Social Service Administration. Taylor was active in Chicago politics as well, serving on the Mayor Busse's Vice Commission and acting as a witness in court cases and an arbiter in labor disputes. He was a member of several local reform groups, including the Civic Federation, the Municipal Voters' League, Chicago Plan Commission, and the Special Park Commission. He disseminated his feelings on reform and social action in the periodicals The Commons and The Survey, as well as in a weekly column in the Chicago Daily News newspaper.

Taylor toured the United States frequently, and went abroad several times to lecture on reform and organizing settlement homes and social programs. He established the Chicago Federation of Settlements with Jane Addams, which led him to become president of several national organizations, such as the National Conference of Charities and Corrections (1914; later called the National Conference of Social Work), and National Federation of Settlements (1917). In 1921 Taylor retired from active administration of the Commons, leaving that work to his daughter Lea, although he remained active in Commons concerns and issues such as Prohibition, public health, and the fate of the poor during the Depression for the rest of his life. In 1926 the University of Chicago completed Graham Taylor Hall, a part of its Chicago Theological Seminary building complex. Taylor died in his sleep on Sept. 26, 1938.