Carlos Fuentes was born in Panama City, Panama, on November 11, 1928, the son of Berta Macías Rivas and Rafael Fuentes Boettiger. At the time of his birth, Carlos Fuentes' father was serving as Mexico's ambassador to Panama. Growing up with a father who was a career diplomat, Carlos Fuentes lived and was educated in many cities in Latin America. During the years, 1934-1939, he lived in Washington, D.C. where his father served as first secretary of Mexico's foreign service delegation to the U.S. He attended primary and secondary schools in Washington, D.C., Mexico City, Mexico, Buenos Aires, Argentina, and Santiago, Chile, and pursued postsecondary studies in Mexico City and Geneva, Switzerland. He received his bachelor's degree from Colegio México and his law degree from the law school of Universidad Nacional Autónoma de México (UNAM), both in Mexico City. Fuentes pursued graduate study at the Institut de Hautes Études Internationales in Geneva in 1950-1951, and also served in the Mexican delegation of the International Labour Organisation (ILO) in Geneva, in 1951.

In 1953, Fuentes won First Prize in an essay contest sponsored by the law school of UNAM, on the occasion of its Fourth Centenary. In the same year, he collaborated with other young Mexican writers, such as Marco Antonio Montes de Oca, José Emilio Pacheco, and Carlos Monsiváis in publishing the magazine Medio Siglo in Mexico City. In 1955, he collaborated with Jaime García Terrés in editing the publication Universidad de México; and throughout the 1950s, Fuentes wrote articles on literature, film, and politics which were published in a wide variety of newspapers and magazines. In 1956, he co-founded and edited the journal Revista Mexicana de Literatura with Mexican writer Emmanuel Carballo. He worked in several positions in the Secretary of Foreign Relations of the Mexican government during the 1950s.

In 1958, Fuentes' first novel, La región más transparente, was published by Fondo de Cultura Económica in Mexico. The first English translation of this novel was published in 1960. In 1962, Carlos Fuentes became an outspoken opponent of American foreign policy in Latin America, when he was invited by Richard N. Goodwin, U.S. assistant secretary of state for inter-American affairs, to participate in a debate on the Alliance for Progress program. Despite the invitation by Goodwin, he was denied a visa by the U.S. government because of his political views. Two years later, in 1964, the Attorney General granted a temporary waiver of his immigration status, and he was able to enter the U.S. Througout the '60s and '70s, Fuentes worked with lawyers to combat his U.S. immigration classification as "undesirable." In particular, he worked with lawyer William D. Rogers, Jr., of the firm Arnold & Porter, and by the 1980s, he had far less trouble obtaining a visa.

In 1962, Fuentes' novels La muerte de Artemio Cruz and Aura were published in Mexico. The first English translations of these novels were published as The Death of Artemio Cruz (translated by Sam Hileman) and Aura (translated by Lysander Kemp) by Farrar, Straus & Giroux in 1964 and 1965, respectively.

In 1965, Fuentes served as Mexico's ambassador to Italy, and he lived in Rome. He moved to Paris in 1966, and befriended artists and writers such as the painters Alberto Gironella, Pierre Alechinsky, and Valerio Adami, and novelist Julio Cortázar. In 1968, Fuentes traveled to Prague with writers Cortázar and Gabriel García Márquez to aid the writers and artists of Czechoslovakia, and he met Milan Kundera for the first time. Fuentes' plays Todos los gatos son pardos and El tuerto es rey were first published in 1970, and in the same year El tuerto es rey was produced at the Theater an der Wien of Vienna and the Festival of Avignon (France).

Fuentes's nonfiction essays and articles of the 1960s and early 1970s were published in two anthologies, Casa con dos puertas (1970) and Tiempo mexicano (1971). In 1972, Fuentes was elected to permanent membership in El Colegio Nacional, México. In 1974, Fuentes held a visiting fellowship at the Woodrow Wilson International Center for Scholars in Washington, D.C.During the period 1971-1974, Fuentes began writing the novel Terra Nostra, and he wrote the essay Cervantes o la crítica de la lectura as an outgrowth of his research for the novel. Terra Nostra was first published in Mexico in 1975, and the English translation by Margaret Sayers Peden, was published under the same title by Farrar, Straus & Giroux in 1976.

Carlos Fuentes served as Mexico's ambassador to France from 1975 to 1977. In 1977, he began a series of teaching and creative writing posts at American universities. He taught at Barnard College, Columbia University, University of Pennsylvania, and in the fall of 1979, at Princeton. He taught at Dartmouth College in 1980-1981 and at Harvard University from 1983 to 1985. In 1986-1987, he held the Simón Bolivar Chair at Cambridge University (England), and in the fall of 1987 he returned to Harvard to inaugurate the Robert F. Kennedy Professorship in Latin American Studies, which he held until July 1988.

In 1985, Fuentes' novel Gringo Viejo and the English translation (by Margaret Sayers Peden and the author) were published. The movie Old Gringo which is based on the novel, was produced by Jane Fonda, filmed in 1988, and released in 1989.

Fuentes moved to London, England in 1990 to collaborate with Malone Gill Productions in the making of the television series The Buried Mirror and the Spanish language version El espejo enterrado. Fuentes served as both principal writer and onscreen host of five television programs which explore the history of Spain and Latin America in light of the quincentenary of Christopher Columbus's landing on the island of San Salvador in 1492.

Some of Fuentes' writings in English were published in Myself with Others: Selected Essays in 1988; other literary essays are compiled in Geografía de la novela (1990) and Valiente Mundo Nuevo: Épica, utopía y mito en la novela hispanoamericana (1993). In recent years, he has published several books of fiction, a revised version of the play Todos los gatos son pardos (published as Ceremonias del alba), and the nonfiction work, Nuevo tiempo mexicano (1995).

Throughout his career, Carlos Fuentes has received many literary prizes, including the following: Biblioteca Breve Prize from Editorial Seix Barral (Barcelona, 1967) for Cambio de piel, Premio Internacional de Novela "Rómulo Gallegos" (Caracas, 1977), Premio Internacional "Alfonso Reyes" (Mexico, 1979), Premio Nacional de Lingüística y Literatura (Mexico, 1984), Premio Miguel de Cervantes (Spain, 1987), and Premio Internacional Menéndez Pelayo (Spain, 1992). He has received honorary doctorates from Harvard, Georgetown, UCLA, and Washington University of St. Louis, Mo., and from many colleges, including Dartmouth and Bard, and Cambridge and Essex Universities in England.

From 1957 to 1969, Carlos Fuentes was married to Rita Macedo, a Mexican film actress. In 1973, he married Sylvia Lemus, a television and newspaper journalist. From his first marriage, he has a daughter, Cecilia (b. 1962), and with Sylvia Fuentes de Lemus he has two children, Rafael (b. 1973) and Natasha (b. 1974). He died on May 15, 2012 in Mexico City, Mexico.