Born in Dudleyville, Alabama in a poverty-striken sharecropper shack, Pepper graduated from the University of Alabama and Harvard Law School. He briefly taught law at the University of Arkansas, and then moved to Perry, Florida, where he opened a law practice. He was elected to the Florida House of Representatives in 1929. After being defeated for reelection he moved his law practice to Tallahassee, the state capital. He lost in the Democratic primary the United States Senate in 1934, but won in a 1936 special election following the death of Senator Duncan Fletcher. In the Senate, Pepper became a leading New Dealer and close ally of President Franklin D. Roosevelt. He was unusually articulate and intellectual, and, collaborating with labor unions, he was often the leader of the liberal-left forces in the Senate. His reelection in a heavily fought primary in 1938 solidified his reputation as the most prominent liberal in Congress. He sponsored the Lend-Lease Act. Because of the power of the Conservative Coalition, he usually lost on domestic policy. However he was more successful in promoting an international foreign policy based on friendship with the Soviet Union. He gave lukewarm support to Harry S. Truman in 1948, saying the Democrats should nominate Dwight D. Eisenhower instead; but he did not support his friend Henry A. Wallace that year. He was re-elected 1944, but lost his bid for a third full term in 1950 by a margin of over 60,000 votes. Ed Ball, a power in state politics who had broken with Pepper financed his opponent, Congressman George A. Smathers. A former supporter of Pepper, Smathers repeatedly attacked "Red Pepper" for having far-left sympathies, condemning his support for the Soviet Union, and for universal health care.

Pepper returned to law practice in Miami and Washington, failing in a comeback to regain his Senate seat in 1958, In 1962 he was elected to the United States House of Representatives from a liberal district around Miami and Miami Beach. He remained there until his death in 1989, rising to chair of the powerful Rules Committee in 1983. At this stage Pepper was staunchly anti-Communist and anti-Castro; he supported aid to the Nicaraguan "Contra" rebels. Pepper in the early 1970s chaired the Joint House-Senate Committee on Crime then, in 1977, became chair of the new House Select Committee on Aging, which became his base as he emerged as the nation's foremost spokesman for the elderly, especially regarding Social Security programs. He succeeded in strengthening the Medicare. In 1986 he passed a federal law that abolished mandatory retirement ages. In the 1980s he worked with Alan Greenspan in a major reform of the Social Security system that maintained its solvency by slowly raising the retirement age, thus cutting benefits for workers in their mid-60s.

Pepper served in Congress and the Senate longer than any other Floridian and became known as the "grand old man of Florida politics". He was featured on the cover of Time magazine in 1950 and 1983. Republicans often joked that he and Tip O'Neill were the only Democrats who really drove President Reagan crazy. When he died, his body lay in state for two days under the Rotunda of the United States Capitol.

A number of places in Florida are named for Pepper, including the Claude Pepper Center at Florida State University (housing a think tank devoted to aging) and the Claude Pepper Federal Building in Miami, as well as several public schools. Large sections of US 27 in Florida are named Claude Pepper Memorial Highway. Pepper's wife Mildred was also well known and respected for her humanitarian work as well. She was also honored with a number of places named in Florida. They had no children; he never recovered from her death in 1979.