The musically-inclined Davies was an art school student in London in 1962-1963, when the Kinks developed into a professional performing band. He also began writing songs at this time. After the Kinks obtained a recording contract in early 1964, Davies emerged as the chief songwriter and de facto leader of the band, especially after the band's breakthrough success of his composition "You Really Got Me". Between 1966 and 1976, Davies led the Kinks through a period of musical experimentation, with notable artistic achievements but limited commercial success. Between 1977 and the groups' informal dissolution in 1996, Davies and the Kinks reverted to a more mainstream rock format, with renewed commercial success. He was inducted into the Rock and Roll Hall of Fame with the band in 1990, and was awarded a CBE by Queen Elizabeth II in 2004. He has intermittently performed solo since the late 1990's.

Davies has described himself as "openly manic-depressive". He has had a tempestous, love-hate relationship with younger brother and Kinks guitarist Dave Davies that dominated the Kinks 30 year career as a band. His compositions and talent as a performer are universally hailed within the music industry, but he has maintained a career-long reputation for being fiercely independent and iconoclastic, resulting in a decades-long pattern of conflict and alienation within the music industry.

He was quoted in 1967: "If I had to do my life over, I would change every single thing I have done."

In 1983, Davies had a daughter, Natalie Rae, with then-girlfriend Chrissie Hynde (of The Pretenders).

On January 4, 2004 Davies was wounded when he was shot in the leg while chasing thieves who had snatched the purse of his companion as they walked in the French Quarter of New Orleans, Louisiana.