Nelson is the son of Emmy Award-winning director Ralph Nelson and the Academy Award-winning actress Celeste Holm. His parents' marriage was brief and he was mostly raised by his grandparents, first in Chicago and later in Greenwich Village.
Nelson earned a BA from Swarthmore College in 1959. While there, he made an experimental humorous student film titled The Epiphany of Slocum Furlow, in which the titular hero discovers the meaning of life. His contemporary at the college, musician and composer Peter Schickele scored the film. In 1960 Nelson began graduate work at Harvard University in philosophy, earning a master's degree in sociology in 1963. Much later in life, in 2002, he obtained a Doctorate in Media and Governance from Keio University.
During college and graduate school, he envisioned a computer-based writing system that would provide a lasting repository for the world's knowledge, and also permit greater flexibility of drawing connections between ideas. This came to be known as Project Xanadu.
Nelson founded Project Xanadu in 1960, with the goal of creating a computer network with a simple user interface. The effort is documented in his 1974 book Computer Lib / Dream Machines and the 1981 Literary Machines. Much of his adult life has been devoted to working on Xanadu and advocating for it.
The Xanadu project itself failed to flourish, for a variety of reasons which are disputed. Journalist Gary Wolf published an unflattering history of Nelson and his project in the June 1995 issue of Wired magazine, calling it "the longest-running vaporware project in the history of computing". On his own website, Nelson expressed his disgust with the criticisms, referring to Wolf as "Gory Jackal", and threatened to sue him. He also outlined his objections in a letter to Wired, and released a detailed rebuttal of the article.
Nelson has stated that some aspects of his vision are being fulfilled by Tim Berners-Lee's invention of the World Wide Web, but he dislikes the World Wide Web, XML and all embedded markup – regarding Berners-Lee's work as a gross over-simplification of his original vision:
HTML is precisely what we were trying to PREVENT— ever-breaking links, links going outward only, quotes you can't follow to their origins, no version management, no rights management.
Jaron Lanier explains the difference between the World Wide Web and Nelson's vision, and the implications:
A core technical difference between a Nelsonian network and what we have become familiar with online is that [Nelson's] network links were two-way instead of one-way. In a network with two-way links, each node knows what other nodes are linked to it. ... Two-way linking would preserve context. It's a small simple change in how online information should be stored that couldn't have vaster implications for culture and the economy.
In 1965, he presented the paper "Complex Information Processing: A File Structure for the Complex, the Changing, and the Indeterminate" at the ACM National Conference, in which he coined the term "hypertext".
Nelson co-founded "itty bitty machine company", or "ibm", which was a small computer retail store operating from 1977 to 1980 in Evanston, Illinois. The itty bitty machine company was one of the few retail stores to sell the original Apple I computer. In 1978 he had a significant impact upon IBM's thinking when he outlined his vision of the potential of personal computing to the team that three years later launched the IBM PC.
From the 1960s to the mid-2000s, Nelson built an extensive collection of direct advertising mail he received in his mailbox, mainly from companies selling products in IT, print/publishing, aerospace, and engineering. In 2017, the Internet Archive began to publish it online in scanned form, in a collection titled "Ted Nelson's Junk Mail Cartons".
As of 2011, Nelson was working on a new information structure, ZigZag, which is described on the Xanadu project website, which also hosts two versions of the Xanadu code. He also developed XanaduSpace, a system for the exploration of connected parallel documents (an early version of this software may be freely downloaded).
In January 1988 Byte magazine published an article about Nelson's ideas, titled "Managing Immense Storage". This stimulated discussions within the computer industry, and encouraged people to experiment with Hypertext features.
In 1998, at the Seventh WWW Conference in Brisbane, Australia, Nelson was awarded the Yuri Rubinsky Memorial Award.
In 2001 he was knighted by France as Officier des Arts et Lettres. In 2004 he was appointed as a Fellow of Wadham College, Oxford, and associated with the Oxford Internet Institute, where he was a visiting fellow from 2004 through 2006. In 2007 he celebrated his 70th birthday by giving an invited lecture at the University of Southampton. In 2014 ACM SIGCHI honored him with a Special Recognition Award.
Nelson is credited with coining several new words that have come into common usage especially in the world of computing. Among them are:"hypertext" and "hypermedia", both coined by Nelson in 1963 and first published in 1965
Popu-litism, a combination of "populism" and "elite"
Many of his books are published through his own company, Mindful Press.Life, Love, College, etc. (1959)
Computer Lib: You can and must understand computers now / Dream Machines: New freedoms through computer screens—a minority report (1974), Microsoft Press, revised edition 1987: ISBN 0-914845-49-7
The Home Computer Revolution (1977)
Literary Machines: The report on, and of, Project Xanadu concerning word processing, electronic publishing, hypertext, thinkertoys, tomorrow's intellectual revolution, and certain other topics including knowledge, education and freedom (1981), Mindful Press, Sausalito, California; publication dates as listed in the 93.1 (1993) edition: 1980–84, 1987, 1990–93
The Future of Information (1997)
A Cosmology for a Different Computer Universe: Data Model, Mechanisms, Virtual Machine and Visualization Infrastructure. Journal of Digital Information, Volume 5 Issue 1. Article No. 298, July 16, 2004
Geeks Bearing Gifts: How The Computer World Got This Way (2008; Chapter summaries)
POSSIPLEX: Movies, Intellect, Creative Control, My Computer Life and the Fight for Civilization (2010), autobiography, published by Mindful Press via Lulu