Born on December 8,1765 in Westborough, Massachusetts, the son of a farmer, Whitney graduated from Yale College in 1792, where he was elected to Phi Beta Kappa. On January 6, 1817 he married Henrietta Edwards and they had four children.

Whitney is credited with creating the first and the only cotton gin in 1793, a mechanical device which removed the seeds from cotton, a process which until that time had been extremely labor-intensive. This contributed to the economic development of the Southern states of the United States, a prime cotton growing area; some historians believe that this invention allowed for the African slavery system in the Southern United States to become more sustainable at a critical point in its development.

While his ideas were innovative and useful, they were so easy to understand and reproduce that the concepts and designs were readily duplicated by others. Whitney's company that produced cotton gins went out of business in 1797.

There exists question today over whether the cotton gin, which Whitney received a patent for on March 14, 1794, and its constituent elements should rightly be attributed to Eli Whitney; some contend that Catherine Littlefield Greene should be credited with the invention of the cotton gin, or at least its conception. It is known that she associated with Eli Whitney (along with other historical figures such as George and Martha Washington).

Eli Whitney is also credited with the creation of interchangeable parts and of mass production of rifles in the late 18th and early 19th centuries. The Eli Whitney Museum is now housed in his former musket factory.