Sesshū was born in Akahama, a settlement in Bitchū Province, which is now part of western Okayama Prefecture. His family name was Oda, but his original name is unknown. He received the name Tōyō in 1431, when he was enrolled at the Hōfuku-ji, a Zen temple in Sōja. Kanō Einō's History of Japanese Painting (Honchogashi), a 17th-century source, contains a well-known anecdote about the young Sesshū: apparently the future painter did not study Zen with enough dedication, preferring instead to spend his time drawing. Once, he was punished for disobedience and tied to a pillar in the hall of the temple. After a while, a priest came to see him and jumped up with surprise—there was a mouse very close to Sesshū's foot. However, it was actually a picture which Sesshū had painted with his tears. Although the story is famous, its authenticity is questionable. At any rate, during his early studies Sesshū would have received instruction not only in religion, but also calligraphy and painting.
Around 1440 Sesshū left Bitchū for Kyoto, a large city which was then the capital of Japan. He lived as a monk at Shōkoku-ji, a famous Zen temple. There, Sesshū studied Zen under Shunrin Suto (春林周藤), a famous Zen master, and painting under Tenshō Shūbun, the most highly regarded Japanese painter of the time. Shūbun's style, like that of most Japanese Zen painters, was inspired by Chinese Song dynasty painters such as Ma Yuan, Xia Gui, Guo Xi, and others. There are no surviving works by Sesshū from this period, but even his late work shows similar influences. Sesshū spent some 20 years in Kyoto, and then left for Yamaguchi Prefecture to become chief priest of Unkoku temple. It was around this time that he started calling himself Sesshū ("snow boat").
Yamaguchi was where many Japanese expeditions to China started, and perhaps Sesshū's choice of the city was dictated by a wish to visit that country. He secured an invitation from Ōuchi family, the lords of Yamaguchi and one of the most powerful families in Japan, and joined a trading trip; in 1468 he landed in Southern China. His duties were to buy Chinese works of art for wealthy Japanese patrons, and to visit and study at Chinese Zen temples. Although the artist himself was disappointed in the art of Ming dynasty, which deviated very far from Song models, he was very taken with Chinese nature and temples. He was quickly recognized as an important painter, and a contemporary source indicates that he may have received a commission from the Imperial Palace at Beijing. Whether this is true, or whether he accepted is unknown; the best surviving works of the period are four landscape scrolls currently in the collection of Tokyo National Museum.
Sesshū stayed in China until 1469. Because of the Ōnin War, he could not stay in Yamaguchi, and settled instead in Ōita Prefecture in Kyūshū, where he built a studio, Tenkai Zuga-rō. He occupied himself with painting and teaching, and frequently made trips to various areas of Japan. On one of such trips, in 1478, Sesshu went to Masuda, Shimane, on invitation from Kanetaka Masuda, the lord of Iwami Province. The painter entered the Sūkan-ji (崇観寺), made two Zen gardens there, and painted the portrait of Masuda Kanetaka, and The Birds and Flowers of Four Seasons.
In 1486 Sesshū came back to Yamaguchi. Many of his extant works date from the last years of his life, including Long Landscape Scroll (Sansui Chōkan, 1486), Splashed-ink Landscape (破墨山水 Haboku sansui) (1495), and others. One such work, View of Ama-no-Hashidate (c. 1501–05), is a bird's eye view of a famous sandbar in Tango Province. To paint it, the artist, who was already well into his eighties, had to climb a tall mountain, so evidently he was still in good health. In 1506, he died, aged 87. A single self-portrait of Sesshū is known through a later copy made by a follower.