Ferry was born in the old mission house on Mackinac Island. The community on Mackinac at that time included the military garrison, the main depot of John Jacob Astor's American Fur Company, and the mission. His father was Presbyterian pastor William Montague Ferry and his mother was Amanda White Ferry who together ran the mission school. Rev. Ferry also was the pastor of the Protestant church on the island. Thomas moved with his parents to Grand Haven, Michigan, attended the public schools, and engaged in mercantile pursuits. He worked as a store clerk in Elgin, Illinois for two years from 1843-1845 before returning to Michigan. He was a member of the Michigan State House of Representatives 1850-1852 and a member of the Michigan State Senate in 1856. On January 26, 1857, Ferry, with his father William Montague Ferry, platted the village of Ferrysburg, Michigan, which his father had first settled in 1834.

He was a delegate to the Loyalist Convention at Philadelphia in 1866. He was elected as a Republican to the United States House of Representatives for the Thirty-ninth, Fortieth, and Forty-first Congresses, serving from March 4, 1865 to March 3, 1871. He was reelected to the Forty-second Congress, but resigned, having been elected to the United States Senate in 1871. He was reelected in 1877, and served from March 4, 1871, to March 3, 1883. He was an unsuccessful candidate for reelection in 1882. Ferry was the first person from Michigan to have served in both houses of the Michigan State Legislature and in both houses of the United States Congress. The second person to do so is Debbie Stabenow.

He served as President pro tempore of the Senate during the Forty-fourth and Forty-fifth Congresses and with the death of Vice President Henry Wilson on November 22, 1875, Ferry became acting vice president, serving as such until March 4, 1877. While acting vice president Ferry was called on, in the absence of President Ulysses S. Grant, to deliver the address and preside at the Philadelphia Centennial Exposition on July 4, 1876. Grant's term expired at noon on March 4, 1877, which was a Sunday and the newly elected president, Rutherford B. Hayes, was formally inaugurated on Monday, March 5. Because the U.S. Constitution specifies that the President shall take the oath of office "before he enter on the execution of his office", Ferry always believed be had served for one day as President of the United States. Since Grant was no longer the President, and Hayes had not assumed the office, the acting vice-president was President. Ferry never knew, and neither did the public, that Hayes had taken the oath in a private ceremony held at the White House the day before.

While Senator, Ferry was chairman, Committee on Rules (Forty-third through Forty-fifth Congresses), Committee on Post Office and Post Roads (Forty-fifth and Forty-seventh Congresses). He presided over the high court of impeachment of U.S. Secretary of War William Belknap and over the sixteen joint meetings of the Senate and House of Representatives during the Hayes-Tilden U.S. presidential electoral contest in 1877.

Ferry died in Grand Haven, Michigan and is interred in Lake Forest Cemetery.