His family was among the founders of what became the city of Tel Aviv, and Sharett was a member of the first graduating class of the first Hebrew high school in the country - the Herzliya Gymnasium. Part of the "younger generation" of the nation's founding fathers, Sharett spoke fluent Arabic and Turkish, opted for Ottoman citizenship and, during World War I, served in the Ottoman army as an interpreter.

Sharett studied law in Istanbul prior to the war, and then studied at the London School of Economics from 1922 to 1924. In 1920 he joined the socialist Ahdut Ha'avoda, which later became Mapai, the leading party in the yishuv. In 1925 he was appointed deputy editor of Davar, the daily paper of the Histadrut-General Federation of Labor, and editor of Davar's English weekly. In 1931 he joined the political section of the Jewish Agency - the "almost-government" of the Jews in Palestine. From 1933 until the establishment of the State of Israel in 1948, Sharett served as head of the political section of the Jewish Agency, a role second only to that of Ben-Gurion, who held the position of chairman of the Jewish Agency. He was the chief negotiator and spokesman of the yishuv vis-à-vis the British Mandatory administration and an important architect of Zionist policy.

Sharett was a major figure in the formulation of mainstream Zionist strategy. He supported the mobilization of Jewish youth into units of the British Army during World War II and was instrumental in the establishment of the Jewish Brigade, while actively opposing the British White Paper policy, which severely restricted Jewish immigration and settlement. He supported Ben-Gurion's strategy of organized mass "illegal" immigration in defiance of British policy and played a major role in mobilizing international support for the November 1947 United Nations Partition Plan and the admission of Israel into the UN.

Moshe Sharett was one of the signatories of Israel's Declaration of Establishment. He became Israel's first Minister of Foreign Affairs (1948-1956), led the Israeli delegation to the cease-fire negotiations during and after the War of Independence and succeeded in establishing bilateral relations with dozens of countries as well as membership in the United Nations. He devoted much of his time as Minister of Foreign Affairs to the issue of reparations from Germany, and in 1952 signed a reparations agreement with West Germany.

In 1953, when Ben-Gurion retired to Kibbutz Sde Boker, Moshe Sharett was appointed his successor by the Mapai party; he also retained the foreign affairs portfolio. Ben-Gurion left the government, but remained politically active behind the scenes throughout Sharett's two-year term in office as Prime Minister. This took place against the backdrop of growing concern over massive arms acquisition by the Arab countries from the Soviet bloc as well as mounting international pressure on Israel to make far-reaching concessions on water rights while still showing restraint in response to attacks from across the borders. Sharett was perceived by Ben-Gurion as being too moderate in retaliation against incursions and attacks on Israeli civilians, while Sharett considered it important to maintain his policy of moderation and de-escalation of the Arab-Israel conflict. In 1955 the rift between them widened considerably, causing a fallout between the two men, who had been close associates and political allies since the 1920s. This fundamental dispute between Ben-Gurion and Sharett ultimately led to Sharett's 1956 resignation and his leaving political life.

As Prime Minister and Foreign Minister, Sharett presided over the continuation of the high-paced national socioeconomic development and immigrant absorption which characterized Israel during this period. He initiated negotiations on arms purchases, which bore fruit after he had left the premiership. The "Lavon affair" - a failed intelligence operation launched by the Minister of Defense without the Prime Minister's knowledge, which was to overshadow Israeli politics for years to come - led to Ben-Gurion's return to the government as Minister of Defense. Following the 1955 elections, Sharett yielded the post of Prime Minister but remained Foreign Minister until June 1956.

Upon his retirement, he became chairman of the Beit Berl College, Director-General of the Am Oved publishing house (both Histadrut institutions) and representative of the Labor Party in the Socialist International. In 1960 Sharett was elected by the World Zionist Congress as Chairman of the World Zionist Organization and the Jewish Agency.

Moshe Sharett died in 1965 at the age of 71.