He was born in Hereford, son of a shoemaker, and educated at Hereford Cathedral School and Brasenose College, Oxford, in 1652, achieving an MA in arts and divinity nine years later. After receiving his degree in 1656 he took holy orders and worked for ten years as a parish priest in Credenhill, near Hereford. In 1667 he became minister at Teddington and private chaplain to Sir Orlando Bridgeman, the Lord Keeper of the Great Seal to Charles II. He died at Bridgeman's house at Teddington on or about 27 September 1674 and is buried in St Mary's Church under the reading desk.
Traherne was an inconsequential literary figure during his life, whose works were unappreciated until long after his death. He led a humble, devout life, largely sheltered from the literary community. Only one of his works, Roman Forgeries (1673), was published in his lifetime. Christian Ethicks (1675) followed soon after his death, and later A Serious and Patheticall Contemplation of the Mercies of God (1699); but after that much of his finest work was lost, corrupted or misattributed to other writers.
His poems have a curious history. They were left in manuscript and presumably passed with the rest of his library into the hands of his brother Philip. They then apparently passed into the possession of the Skipps family of Ledbury, Herefordshire. When the property of this family was dispersed in 1888 the value of the manuscripts was unrecognised, for in 1896 or 1897 they were discovered by W. T. Brooke on a street bookstall. Alexander Grosart bought them, and proposed to include them in his edition of the works of Henry Vaughan, to whom he was convinced the writings belonged. He left this task uncompleted, and Bertram Dobell, who eventually secured the manuscripts, discerned that the author had attended Oxford University. He was then able to establish the authorship of Thomas Traherne.