William was born on 3rd March 1611 and Christened at St Andrew's church, Holborn, London. His parents were William Dobson and Alice Barnes, who married at Allhallows Honey Lane, London, in 1605. William was one of around eight or nine children, the last of whom, Abraham, was born in 1623. William Sr was a 'Gentleman' of some money, but he appears to have wasted his estate, dying in 1626, and, as noted by the antiquarian author, John Aubrey, due to 'spending his estate luxuriously upon women, necessity forced his son William Dobson to be the most excellent painter England hath yet bred'.

William Jr was apprenticed to William Peake, a Stationer, and later worked with German artist Francis Cleyn. By the early 1630s his apprenticeship had ended and he was possibly married, as there is a record of an 'Elizabeth Dobson, wife of William' buried at St Martin-in-the-Fields churchyard in 1634. Little is known of his works or life during this decade, and very few paintings have been identifed as his from this period. The IGI (International Genealogical Index) notes that a William Dobson married Judeth Sander on 18th December 1637, at St Bride Fleet St, London. No definite record of any children from this marriage has been found, but it is intriguing that the IGI also notes the Christening of a Katherin Dobson in 1639,  born to 'William Dobson' and 'Judith'.

By late 1641/early 1642, through circumstances that are unclear, William was in Oxford, the Royalist  headquarters of King Charles I during the Civil War. He was employed as the official painter to the King, replacing the Flemish artist, Anthony van Dyck, who had died the previous year. For the next three or four years, William produced portraits of King Charles himself, the King's nephew, Prince Rupert, and many soldiers of the Royalist army, including  John, 1st Baron Byron, and James Graham, Marquess of Montrose. Dobson's best works seem to have been undertaken during the years 1644/45, and the full and three-quarter length portraits are dated to this period.  After 1645, the paintings are mainly head-and-shoulder works, using very thin paint and plain backgrounds. Due to shortages caused by the war, the required paints and canvases would have been harder to obtain, and rationing of supplies would have been necessary. It is also likely that, because soldiers were constantly going in and out of Oxford throughout the war, they would have had limited time in which to sit for portraits, and William was forced to capture their likenesses in the short time available.

When Oxford finally fell to the Parliamentarians in 1646, William returned to his house in St Martin's Lane, London. Evidence suggest that at some point after this he was jailed for debts, and a 1695 comment concerning him would seem to support this, stating that he 'was somewhat loose and irregular in his way of Living.'  Whatever the reason for his financial situation, on his release William returned to St Martin's Lane, dying there in 'great poverty' in October 1646. He was buried at St Martin-in-the-Fields.