O. Henry William Sidney Porter was born on the plantation "Worth Place" in Greensboro, North Carolina. His father, Algernon Sidney Porter, was a physician. When William was three, his mother died of tuberculosis, and he and his father moved to the home of his paternal grandmother.
William was an avid reader, and graduated from his aunt's elementary school in 1876, then enrolled at the Linsey Street High School. In 1879 he started working as a bookkeeper in his uncle's drugstore and in 1881 - at the age of nineteen - he was licensed as a pharmacist
He relocated to Texas in 1882, initially working on a ranch in La Salle County as a sheep herder and ranch hand, then Austin where he took a number of different jobs over the next several years, including pharmacist, draftsman, journalist, and clerk. While in Texas he also learned Spanish.
In 1887 he eloped with Athol Estes, then seventeen years old and from a wealthy family. Her family objected to the match because both she and Porter suffered from tuberculosis. Athol gave birth to a son in 1888, who died shortly after birth, and then a daughter, Margaret, in 1889.
In 1894 Porter started a humorous weekly called The Rolling Stone. Also in 1894, Porter resigned from the First National Bank of Austin where he had worked as a teller, after he was accused of embezzling funds. In 1895, after The Rolling Stone ceased publication, he moved to Houston, where he started writing for the Houston Post. Shortly thereafter, he was arrested for embezzlement in connection with his previous employment in Austin.
Porter was granted bond, but the day before he was due to stand trial on July 7, 1896, he absconded to New Orleans and later to Honduras. However, in 1897, when he learned that his wife was dying, he returned to the United States and surrendered to the court, pending an appeal.
Athol Estes Porter died July 25, 1897. Porter was found guilty of embezzlement, sentenced to five years jail, and imprisoned April 25, 1898 at the Ohio State Penitentiary. He was released on July 24, 1901 for good behaviour after serving three years.
Porter published at least twelve stories while in prison to help support his daughter. Not wanting his readers to know he was in jail, he started using the pen name "O. Henry". It is believed that Porter got this name from one of the guards who was named Orrin Henry. Other sources say that the name was derived from his calling "Oh Henry!" after the family cat, Henry. Guy Davenport wrote that the name was a condensation of "Ohio Penitentiary".It also could be an abbreviation of the name of a French pharmacist, Etienne-Ossian Henry, found in the U.S. Dispensatory, a reference work Porter used when he was in the prison pharmacy. Further confusing the issue is that for at least one short story, and for a later author profile, he used the "full" name Olivier Henry.
Porter also used a number of other noms de plume, most notably James L. Bliss, and continued using pen names full-time when he took a writing contract for Ainslee's Magazine in New York City shortly after his release from prison. Eventually, "O. Henry" became the name that became most recognized by magazine editors and the reading public, and therefore lead to the greatest fees for story sales. Accordingly, after about 1903 Porter used the "O. Henry" byline exclusively.
He married again in 1907 to his childhood sweetheart, Sarah Lindsey Coleman. However, despite the success of his short stories being published in magazines and collections (or perhaps because of the attendant pressure success brought), Porter became an alcoholic. Sarah left him in 1909, and he died in 1910 of cirrhosis of the liver. After funeral services in New York City, he was buried in Asheville, North Carolina. His daughter, Margaret Worth Porter, died in 1927 and was buried next to her father.