Marks was born into a Polish-Jewish and Belarusian-Jewish family in Słonim, in the Grodno Governorate of the Russian Empire, now a town in Belarus. He emigrated to England around 1882 and moved to Leeds, where a company called Barran was known to employ Jewish refugees. He married Hannah Cohen at the Great Synagogue on Belgrave Street, Leeds, in 1886. His date of birth is unknown; his naturalisation papers say 1859, but his age on his marriage certificate suggests 1863 or 1864.
Marks met Isaac Dewhirst, the owner of a Leeds warehouse, in 1884. A deal was arranged whereby Marks agreed to buy goods from Dewhirst and sell them in nearby villages. The venture was a success and enabled Marks to raise enough capital to establish a stall in Leeds' open market. He also sold goods at Castleford and Wakefield markets.
Marks also made the decision to rent an area at the new covered market in Leeds, which traded six days of the week. Famously, one of his stalls sold goods that cost only one penny. Next to the stall was a poster with the words "Don't Ask the Price, It's a Penny". Over the next few years, Marks expanded his business and opened similar stalls in covered market halls all over Yorkshire and Lancashire.
In 1894, Marks decided that if he was to expand the business further he would need a business partner. He initially approached Isaac Dewhirst, who decided against the offer but suggested that his cashier Thomas Spencer might be interested. Spencer decided that the £300 (adjusted by inflation £30807) required for a half-share in the business would be a good investment.
The running of the business was split between Spencer, who managed the office and warehouse, and Marks, who continued to run the market stalls. Spencer had developed some important contacts while working for Isaac Dewhirst, and these allowed him to get the best prices for goods by dealing directly with the manufacturers. Together, Spencer and Marks were able to open stores in Manchester, Birmingham, Liverpool, Middlesbrough, Sheffield, Bristol, Hull, Sunderland and Cardiff.
A new warehouse in Manchester was built in 1897. This store became the centre of a business empire that by then included thirty-six branches. New stores had been built in Bradford, Leicester, Northampton, Preston, and Swansea. London had a total of seven branches.
On 5 May 1897, Marks was naturalised as a British subject.
In 1903 Marks & Spencer became a limited company. Spencer's original £300 investment had grown to a value of £15,000 (adjusted by inflation £1540364), and he retired later that year. Michael Marks continued to develop the business until his death at the age of 48, at Knoll House, 396 Bury New Road, Salford, on 31 December 1907. He was buried in the Old Jewish cemetery (Hebrew Congregation), Crumpsall, in plot number 1917 on 2 January 1908.
In the 1930s, long after the death of Marks, his son Simon Marks, later the first Baron Marks of Broughton, laid the foundations for a long tradition. He introduced the "St Michael" brand name in honour of his father, and it was in use until 2000.