Born in St. Thomas, Virgin Islands, of British parents, Benjamin was a British subject. His family moved to Charleston, South Carolina, while he was still a boy. He was at Yale University for two years, but studied law privately in New Orleans while earning a meager living as a tutor in English and as a clerk in a business establishment. Deprived of a happy home through an unsuccessful marriage to a non-Jewess, Natalie St. Martin, who left him to live in Paris, he was free to devote himself to law and politics. His legal eminence brought him wealth, and his political activity fame. He was the first professing Jew to be elected to the United States Senate, as a Whig in 1852, and as a Democrat (after the Democratic Party espoused the cause of Southern rights) in 1856. He became a leading member of the school of Southern politicians which favored secession from the Union as the only safeguard for Southern survival, and delivered a number of major addresses in the Senate defending slavery. When Louisiana seceded, he withdrew from the Senate, and was immediately called to the cabinet of the newly created Confederate government (March 1861) as attorney general. President Jefferson Davis relied heavily upon Benjamin's companionship and counsel and appointed him to the more important position of secretary of war in September 1861. Benjamin's apparent responsibility for a number of military disasters, which involved shortages of ammunition and other equipment which could not be made public, however, brought about his resignation in March 1862. Davis promptly put the lie to a large number of anti-Semitic attacks upon Benjamin by appointing him secretary of state, a position which he held until the collapse of the Confederacy. In this role Benjamin came close to obtaining recognition of and help for the Confederacy from England and France. But the Confederacy's cause was doomed from the first, and after Lee's surrender to Grant (April 1865) Benjamin was the only leading Confederate to choose exile rather than live in the defeated South. He escaped to England through Florida and Nassau, and there made for himself a distinguished career as barrister (he was appointed Queen's Counsel), which in many ways outshadowed his prewar American legal career. Ill health forced his retirement from active work in 1882 and he died two years later in Paris where he had finally rejoined his wife and daughter.

Benjamin took no interest in Jewish affairs, although he never denied his origin and was never converted to the Catholic faith of his wife. There is no record of membership on his part in any synagogue, nor did he ever give support to any Jewish cause or organization.