A former ship's steward and trade union activist, by the 1980s he was presented as the political link to the working class in a Labour Party increasingly led by modernising, middle-class professionals. In his youth, Prescott managed to overcome the handicap of failing his 11-plus entrance examination for grammar school, going on to graduate from Ruskin College in Oxford. Prescott also developed a reputation as a key conciliator in the often tense relationship between then-Chancellor Gordon Brown and then-Prime Minister Tony Blair.

On 27 June 2007 he resigned as Deputy Prime Minister, to coincide with Blair's resignation as Prime Minister. Following an election within the Labour Party, he was replaced as Deputy Leader by Harriet Harman. Prescott stepped down as an MP at the May 2010 general election. On 8 July 2010 he entered the House of Lords as a life peer with the title "Baron Prescott, of Kingston upon Hull in the County of East Yorkshire"; he is now often referred to as Lord Prescott.

The son of a railway signalman and Labour councillor, and grandson of a miner, Prescott was born in Prestatyn (now in Denbighshire), Wales. In 2009, he said: "I’ve always felt very proud of Wales and being Welsh...I was born in Wales, went to school in Wales and my mother was Welsh. I’m Welsh. It’s my place of birth, my country." He left Wales in 1942 at the age of four and was brought up initially in Brinsworth in South Yorkshire, England. He attended Brinsworth Primary School (known then as Brinsworth Manor School), where he sat but failed the 11-plus examination in 1949. Shortly after, his family moved to Upton, Cheshire and he went to school in nearby Ellesmere Port, where he attended Grange Secondary Modern School. He became a steward and waiter in the Merchant Navy, thus avoiding National Service, working for Cunard, and was a popular left-wing union activist. Prescott's time in the Merchant Marine included a cruise from England to New Zealand in 1957. Among the passengers was Sir Anthony Eden, recuperating after his resignation over the Suez Crisis. Prescott reportedly described Eden as a "real gentleman". Apart from serving Eden, who stayed in his cabin much of the time, Prescott also won several boxing contests, at which Eden presented the prizes. He married Pauline "Tilly" Tilston at Upton Church in Chester on 11 November 1961. He then went to the independent Ruskin College in Oxford, which specialises in courses for union officials, where he gained a diploma in economics and politics in 1965. In 1968, he obtained a BSc in economics and economic history at the University of Hull.

He returned to the National Union of Seamen as a full-time official before being elected to the House of Commons as Member of Parliament (MP) for Hull East in 1970, succeeding Commander Harry Pursey, the retiring Labour MP. The defeated Conservative challenger was Norman Lamont. Previously, he had attempted to become MP for Southport in 1966, but came in second place, approximately 11,200 votes behind the Conservative candidate. From 1974 to 1979, he concurrently served as a Member of the European Parliament (MEP) and Leader of the Labour Group, when its members were nominated by the national Parliaments.

Prescott held various posts in Labour's Shadow Cabinet, but his career was secured by an impassioned closing speech in the debate at the Labour Party Conference in 1993 on the introduction of "one member, one vote" for the selection and reselection of Labour Parliamentary candidates that helped swing the vote in favour of this reform. In 1994 Prescott was a candidate in the party leadership election that followed the death of John Smith, standing for the positions of both leader and deputy leader. Tony Blair won the leadership contest, with Prescott being elected deputy leader.

With the election of a Labour Government in 1997, Prescott was made Deputy Prime Minister and given a very large portfolio as the head of the newly created Department for Environment, Transport and the Regions.

In the United Kingdom, the title of Deputy Prime Minister is used only occasionally, and confers no constitutional powers (in which it is similar to the pre-20th century usage of Prime Minister). The Deputy Prime Minister stands in when the Prime Minister is unavailable, most visibly at Prime Minister's Questions, and Prescott has attended various Heads of Government meetings on behalf of Tony Blair.

Since the position of Deputy Prime Minister draws no salary, Prescott's remuneration was based on his position as Secretary of State for the Environment, Transport and the Regions until 2001. This "super department" was then broken up, with the Department for the Environment, Food and Rural Affairs and the Department for Transport established as separate entities. Prescott, still Deputy Prime Minister, was also given the largely honorific title of First Secretary of State. In July 2001 an Office of the Deputy Prime Minister (ODPM) was created to administer the areas remaining under his responsibility. This was originally part of the Cabinet Office, but became a department in its own right in May 2002, when it absorbed some of the responsibilities of the former Department for Transport, Local Government and the Regions. The OPDM had responsibility for local and regional government, housing, communities and the fire service.

The UK played a major role in the successful negotiations on the Kyoto Protocol on climate change and Prescott led the UK delegation at the discussions.

In May 2006, in recognition of his work in delivering the Kyoto Treaty, Tony Blair asked Prescott to work with the Foreign Secretary and the Environment Secretary on developing the Government's post-Kyoto agenda.