Carteret was the son of Elias de Carteret and Elizabeth Dumaresq of Jersey, who both died in 1640 (George dropped the "de" from his surname when he entered the English navy, concerned that it sounded too French). He was "bred for the sea" and served as an officer in various naval ships in the 1630s and commanded the Mary Rose before becoming Comptroller of the Navy in 1641.
As a result of his early life at sea, he received little or no formal education, and his embarrassing ignorance was a source of much ridicule in later life. Andrew Marvell mocked his poor command of English, and Samuel Pepys remarked that his ignorance of even the most basic Latin phrases would cause a schoolboy to be whipped; "such ignorance is not to be borne in a Privy Councillor', wrote Pepys severely.
On the commencement of the Civil War he retired from the navy, and withdrew with his family to Jersey, but subsequently returned to aid the projects of the royalists. He afterwards, on the ruin of the royal cause, afforded an asylum to the Prince of Wales (Charles Stuart) and other refugees of distinction within his government of Jersey where he served as Bailiff (1643–1651), and defended the island against the Parliamentarians, the Island in October and then Elizabeth Castle surrendering in December 1651.
George Carteret also had Charles II proclaimed King in Saint Helier on 17 February 1649, after the execution of his father, Charles I. Charles II never forgot this gesture. However, he had to surrender Jersey to the Commonwealth of England. He then went into exile in France, where he was imprisoned in 1657 and then exiled from there, after which he went to Venice. The warmth and kindness with which he received the refugees earned him a permanent place in the King's affections, and also the friendship of Edward Hyde, 1st Earl of Clarendon, the King's chief adviser during his exile and for the first few years after the Restoration.
Carteret was sworn into the Privy Council, appointed Vice-Chamberlain of the Household, and constituted Treasurer of the Navy. His career for the next decade is documented in the diary of Samuel Pepys who joined him as Clerk of the Acts to the Navy Board in 1660. In 1667, he exchanged his office as Vice-Chamberlain with Lord Anglesey for that of Vice-Treasurer of Ireland, an office which he sold in 1669 for £11,000. His influence seems to have been at its height in 1665, when he boasted to Pepys that the King did nothing without his knowledge; however as the naval war dragged on the Treasurer of the Navy was an obvious target and Pepys noted that by the spring of 1666 Carteret was being attacked on all sides. By the autumn of 1667 he confessed to Pepys that he was longing for the quiet of retirement.
The fidelity with which Carteret, like John Berkeley, 1st Baron Berkeley of Stratton, had clung to the royal cause, gave him also great influence at court: he was close to Clarendon, and to the Earl of Sandwich, whose daughter married Cartaret's eldest son. He had, at an early date, taken a warm interest in the colonization of America. In recognition of all the help given to him during his exile in Jersey in the 1640s, Charles II gave Carteret a large grant of land previously named New Netherland, which was promptly renamed New Jersey under his charge. With Berkeley, he became one of the proprietors of the Province of Carolina prior to their becoming jointly interested in East Jersey. Carteret County, North Carolina and town of Carteret, New Jersey are named after him, and the city of Elizabeth, New Jersey is named after his wife.
In 1665, Carteret was one of the drafters of the Concession and Agreement, a document that provided freedom of religion in the colony of New Jersey. It was issued as a proclamation for the structure of the government for the colony written by the two proprietors, Lord Berkeley and Sir George Carteret.
In 1669, he faced expulsion from the House of Commons to which he had been elected in 1661 to represent Portsmouth, for misconduct as Vice Chamberlain, being accused of embezzlement. After an announcement from the king expressing his satisfaction with Carteret and an acquittal by the House of Lords, the inquiry against him lapsed.
In 1673, he was appointed one of the Lords of the Admiralty, and continued in the public service until his death on 14 January 1680.
Shortly before Carteret's death, the king proposed to give him the title Baron Carteret, but Carteret died too soon, so the honour was granted to his grandson George.
In the Chapel of Mont Orgueil Castle, May 1640, George Carteret married his cousin Elizabeth de Carteret, daughter of Philippe de Carteret II, 3rd Seigneur de Sark. They had three sons-Philip (1641–1672), their eldest son, married Lady Jemima Monague, daughter of Edward Montagu, 1st Earl of Sandwich, and had four children: his eldest son George was raised to the peerage. Philip was killed at the Battle of Sole Bay, along with his father-in-law; Jemima had died in childbirth in November of the previous year.
James (d. after 1679), was a captain in the Royal Navy, married and had children
George (d.1656), who died unmarried.
- and five daughters:
Elizabeth (who never married)
Louisa-Margaret, who married Sir Robert Atkyns of Sapperton, only son of Sir Robert Atkyns, Lord Chief Baron of the Exchequer; her family nickname was "Louisonne", according to Samuel Pepys
Anne who married Sir Nicholas Slanning, 1st Baronet
Caroline, who married Sir Thomas Scott of Scot's Hall, son of Edward Scott and Lady Catherine Goring, daughter of George Goring, 1st Earl of Norwich.
Elizabethtown, North Carolina is named for Elizabeth de Cartaret, the wife of Sir George Carteret.