Born in Brighton, Carpenter attended Trinity College, Cambridge before joining the church as a curate. He was heavily influenced by the minister at his church, the leader of the Christian Socialist movement. Carpenter later left the church and became a lecturer in astronomy. During this period, he moved to Sheffield to live fairly openly in a same sex relationship.
In 1883, Carpenter joined the Social Democratic Federation, and in 1885 he left to join the Socialist League. After dabbling in the Labour Church movement, and achieving growing acclaim for his poetry, he became a founder member of the Independent Labour Party in 1893. His pacifism led him to become a vocal opponent of first the Boer War and then the First World War.
In the 1890s, Carpenter began to campaign against discrimination on the grounds of sexual orientation. He strongly believed that sexuality was innate. In 1908, he wrote Intermediate Sex, an important though at the time highly controversial book on the subject.