Qaboos was born in Salalah in Dhofar on 18 November 1940 as an only son of Sultan Said bin Taimur and Sheikha Mazoon al-Mashani.

He received his primary and secondary education at Salalah, and was sent to a private educational establishment at Bury St Edmunds in England at age 16.

At 20, he entered the Royal Military Academy Sandhurst.

After graduating from Sandhurst in September 1962, he joined the British Army and was posted to the 1st Battalion The Cameronians (Scottish Rifles), serving with them in Germany for one year. He also held a staff appointment with the British Army.

The first pressing problem that Qaboos bin Said faced as Sultan was an armed communist insurgency from South Yemen, the Dhofar Rebellion (1962–1976). The sultanate eventually defeated the incursion with help from the Shah of Iran, Jordanian troops sent from his friend King Hussein of Jordan, British Special Forces and the Royal Air Force.

After his military service, Qaboos studied local government subjects in England and then completed his education with a world tour chaperoned by Leslie Chauncy. Upon his return in 1966, he was placed under virtual house arrest in the Sultan's palace in Salalah by his father.

Qaboos acceded to the throne on 23 July 1970 following a successful coup against his father, with the aim of ending the country's isolation and using its oil revenue for modernization and development. He declared that the country would no longer be known as Muscat and Oman, but would change its name to "the Sultanate of Oman" in order to better reflect its political unity.

The political system which Qaboos established is that of an absolute monarchy. The Sultan's birthday, 18 November, is celebrated as Oman's national holiday. The first day of his reign, 23 July, is celebrated as Renaissance Day.

On 22 March 1976, Qaboos bin Said married his first cousin, Kamila née Sayyida Nawwal bint Tariq Al Said (born 1951), daughter of Sayyid Tariq bin Taimur Al Said and his second wife, Sayyida Shawana bint Nasir Al Said. The marriage ended in divorce in 1979. She remarried in 2005. The marriage produced no heirs, and Qaboos bin Said wrote secret documents naming the successor to his realm.

In September 1995, Qaboos was involved in a car accident in Salalah just outside his palace, which claimed the life of one of his most prominent and influential ministers, Qais Bin Abdul Munim Al Zawawi.

Oman has no system of checks and balances, and thus no separation of powers. All power is concentrated in the sultan, who is also chief of staff of the armed forces, Minister of Defense, Minister of Foreign Affairs and chairman of the Central Bank. All legislation since 1970 has been promulgated through royal decrees, including the 1996 Basic Law. The sultan appoints judges, and can grant pardons and commute sentences. The sultan's authority is inviolable and the sultan expects total subordination to his will.

In 2011, Qaboos facilitated the release of American hikers who were held by Iran, paying $1 million for their freedom.

In October 2018, Qaboos invited Prime Minister of Israel Benjamin Netanyahu to visit Oman, a country that does not have official diplomatic ties with Israel. Netanyahu was the first Israeli prime minister to visit Oman since Shimon Peres in 1996.

He died on 10 January 2020 at the age of 79. The following day, the government declared three days of national mourning and said the country's flag would be flown at half-staff for a period of 40 days.