Coleman was born on January 26, 1892, in Atlanta, Texas, to a large African American family (although some histories incorrectly report 1893 or 1896). She was one of 13 children. Her father was a Native American and her mother an African American. Very early in her childhood, Bessie and her family moved to Waxahachie, Texas, where she grew up picking cotton and doing laundry for customers with her mother.

The Coleman family, like most African Americans who lived in the Deep South during the early 20th century, faced many disadvantages and difficulties. Bessie's family dealt with segregation, disenfranchisement, and racial violence. Because of such obstacles, Bessie's father decided to move the family to "Indian Territory" in Oklahoma. He believed they could carve out a much better living for themselves there. Bessie's mother, however, did not want to live on an Indian reservation and decided to remain in Waxahachie. Bessie, and several of her sisters, also stayed in Texas.

Bessie was a highly motivated individual. Despite working long hours, she still found time to educate herself by borrowing books from a travelling library. Although she could not attend school very often, Bessie learned enough on her own to graduate from high school. She then went on to study at the Colored Agricultural and Normal University (now Langston University) in Langston, Oklahoma. Nevertheless, because of limited finances, Bessie only attended one semester of college.

By 1915, Bessie had grown tired of the South and moved to Chicago. There, she began living with two of her brothers. She attended beauty school and then started working as a manicurist in a local barbershop.

Bessie first considered becoming a pilot after reading about aviation and watching newsreels about flight. But the real impetus behind her decision to become an aviator was her brother John's incessant teasing. John had served overseas during World War I and returned home talking about, according to historian Doris Rich, "the superiority of French women over those of Chicago's South Side." He even told Bessie that French women flew airplanes and declared that flying was something Bessie would never be able to do. John's jostling was the final push that Bessie needed to start pursuing her pilot's license. She immediately began applying to flight schools throughout the country, but because she was both female and an African American, no U.S. flight school would take her.

Soon after being turned down by American flight schools, Coleman met Robert Abbott, publisher of the well-known African American newspaper, the Chicago Defender. He recommended that Coleman save some money and move to France, which he believed was the world's most racially progressive nation, and obtain her pilot's license there. Coleman quickly heeded Abbott's advice and quit her job as a manicurist to begin work as the manager of a chili parlour, a more lucrative position. She also started learning French at night. In November 1920, Bessie took her savings and sailed for France. She also received some additional funds from Abbott and one of his friends.

Coleman attended the well-known Caudron Brothers' School of Aviation in Le Crotoy, France. There she learned to fly using French Nieuport airplanes. On June 15, 1921, Coleman obtained her pilot's license from Federation Aeronautique Internationale after only seven months. She was the first black woman in the world to earn an aviator's license. After some additional training in Paris, Coleman returned to the United States in September 1921.

Coleman's main goals when she returned to America were to make a living flying and to establish the first African American flight school. Because of her color and gender, however, she was somewhat limited in her first goal. Barnstorming seemed to be the only way for her to make money, but to become an aerial daredevil, Coleman needed more training. Once again, Bessie applied to American flight schools, and once again they rejected her. So in February 1922, she returned to Europe. After learning most of the standard barnstorming tricks, Coleman returned to the United States.

Bessie flew in her first air show on September 3, 1922, at Glenn Curtiss Field in Garden City, New York. The show, which was sponsored by the Chicago Defender, was a promotional vehicle to spotlight Coleman. Bessie became a celebrity, thanks to the help of her benefactor Abbott. She subsequently began touring the country giving exhibitions, flight lessons, and lectures. During her travels, she strongly encouraged African Americans and women to learn to fly.

In February 1923, Coleman suffered her first major accident while preparing for an exhibition in Los Angeles; her Jenny airplane's engine unexpectedly stalled and she crashed. Knocked unconscious by the accident, Coleman received a broken leg, some cracked ribs, and multiple cuts on her face. Shaken badly by the incident, it took her over a year to recover fully.

Coleman started performing again full time in 1925. On June 19, she dazzled thousands as she "barrel-rolled" and "looped-the-loop" over Houston's Aerial Transport Field. It was her first exhibition in her home state of Texas, and even local whites attended, although they watched from separate segregated bleachers.

Even though Coleman realized that she had to work within the general confines of southern segregation, she did try to use her fame to challenge racial barriers, if only a little. Soon after her Houston show, Bessie returned to her old hometown of Waxahachie to give an exhibition. As in Houston, both whites and African Americans wanted to attend the event and plans called for segregated facilities. Officials even wanted whites and African Americans to enter the venue through separate "white" and "Negro" admission gates, but Coleman refused to perform under such conditions. She demanded only one admission gate. After much negotiation, Coleman got her way and Texans of both races entered the air field through the same gate, but then separated into their designated sections once inside.

Coleman's aviation career ended tragically in 1926. On April 30, she died while preparing for a show in Jacksonville, Florida. Coleman was riding in the passenger seat of her "Jenny" airplane while her mechanic William Wills was piloting the aircraft. Bessie was not wearing her seat belt at the time so that she could lean over the edge of the cockpit and scout potential parachute landing spots (she had recently added parachute-jumping to her repertoire and was planning to perform the feat the next day). But while Bessie was scouting from the back seat, the plane suddenly dropped into a steep nosedive and then flipped over and catapulted her to her death. Wills, who was still strapped into his seat, struggled to regain control of the aircraft, but died when he crashed in a nearby field. After the accident, investigators discovered that Wills, who was Coleman's mechanic, had lost control of the aircraft because a loose wrench had jammed the plane's instruments.

Coleman's impact on aviation history, and particularly African Americans, quickly became apparent following her death. Bessie Coleman Aero Clubs suddenly sprang up throughout the country. On Labour Day, 1931, these clubs sponsored the first all-African American Air Show, which attracted approximately 15,000 spectators. That same year, a group of African American pilots established an annual flyover of Coleman's grave in Lincoln Cemetery in Chicago. Coleman's name also began appearing on buildings in Harlem.