Terry Jones was born in Colwyn Bay, North Wales, the son of Dilys Louisa (Newnes), a homemaker, and Alick George Parry Jones, a bank clerk. His older brother is production designer Nigel Jones. His grandparents were involved in the entertainment business, having managed the local Amateur Operatic Society and staged Gilbert and Sullivan concerts. Jones studied at St. Edmund Hall College, Oxford University, read English but graduated with a degree in History. He was variously captain of boxing, captain of the Rugby Team and School Captain. At about this time, he befriended Michael Palin. Both performed comedy together as part of the Oxford Revue. In 1965, he again partnered Palin in The Late Show (1966) and worked in the dual capacity of writer/actor on Do Not Adjust Your Set (1967) with Palin, Eric Idle and David Jason. Another noteworthy television credit was Complete and Utter History of Britain (1969) (again with Palin) in which fun was poked at famous historical personae, Jones essaying Oliver Cromwell, Sir Walter Raleigh and Henry VIII (among others).

Needless to say that Jones found his greatest success as a founding member of the anarchic and irreverent Monty Python's Flying Circus (1969), along with Palin, Idle, Graham Chapman, John Cleese and Terry Gilliam. Jones not only provided much of the written comic input, but also portrayed many of the classic characters: the implausibly obese Mr. Creosote in The Meaning of Life (1983) (who explodes after one more little wafer), the inept Detective Superintendent Harry "Snapper" Organs in the Piranha Brothers sketch (a take on the Kray Twins), the tobacconist in the Dirty Hungarian Phrasebook sketch and numerous assorted shrill-voiced, slovenly 'rat-bag women' (Mrs. Equator comes to mind).

The Pythons were unconventional, controversial, certainly groundbreaking and invariably inspired, at their best in their unrelenting satirical attacks on established British institutions, ruling hierarchies and the class structure. Jones later said "The thing is we never thought Python was a success when it was actually happening, it was only with the benefit of hindsight". In addition to writing and acting, Jones also co-directed Monty Python and the Holy Grail (1975) (with Terry Gilliam) and took solo directing credit for Monty Python's Life of Brian (1979) and The Meaning of Life. Post-Python, he rejoined Palin as co-writer for some of the very best episodes of Ripping Yarns (1976), including Whinfrey's Last Case, Tompkinson's Schooldays, Murder at Moorstone Manor, The Curse of the Claw and The Testing of Eric Oldthwaite. Jones later scripted Labyrinth (1986) from a story by Jim Henson and Dennis Lee and wrote, as well as directed, Erik the Viking (1989) and Absolutely Anything (2015), a science fiction comedy with Simon Pegg and Kate Beckinsale.

On a more serious note, Jones sidelined as a newspaper columnist and was an outspoken social and political commentator (a staunch critic of the Iraq War). His lifelong fascination with medieval and ancient history (and Geoffrey Chaucer in particular) led to presenting a series of television documentaries (Medieval Lives (2004) and Barbarians (2006))) as well as publishing several well researched, if sometimes controversial, books including Chaucer's Knight: The Portrait of a Medieval Mercenary and Who Murdered Chaucer?: A Medieval Mystery.

Jones died at the age of 77 on 21 January 2020 from complications of dementia, at his home in Highgate, North London.