Tammany Hall had existed since 1789. Tweed was a chairmaker who used his popularity as a volunteer fire fighter in the Americus Engine Company No. 6, also known as the "Big Six," to advance himself. He eventually became a chief in the fire department. He became an alderman in 1851 and he built his power through the election and appointment of his friends. Tweed and his cronies became known as the Tweed Ring. Tweed's political machine gained numerous offices in New York City, and even to the state legislature and judges' seats, often through illegal means. From 1860-1870, Tweed controlled almost every single United States Democratic Party nomination for the city and the state.

Tweed himself was elected to the United States House of Representatives in 1852, the New York City Board of Advisors in 1856, and the New York State Senate in 1867.

Financiers Jay Gould and Big Jim Fisk made Boss Tweed a director of the Erie Railroad, and Tweed in turn arranged favorable legislation for them. Tweed and Gould became the subjects of political cartoons by Thomas Nast in 1869.

In April 1870, at the age of 47, Tweed secured the passage of a city charter putting the control of the city into the hands of the mayor (A. Oakey Hall), the comptroller, and the commissioners of parks and public works. He then set about to plunder the city. The total amount of money stolen was never known, but was estimated to be about $200 million. Over a period of two years and eight months, New York City's debts increased by $81,000,000, with little to show for the debt.

His followers generally worked by presenting excessive bills for work performed. Ostensibly the bills were paid in full, but in reality only part of the amount was paid, with Tweed retaining the remainder and dividing it between his followers in proportion to their importance. For example, the city was billed $13,000,000 to build a courthouse, which was many times the actual cost of construction, estimated to be $250,000; and $3,000,000 for city printing and stationery over a two-year period.

The end came when one of the plunderers, dissatisfied with the amount he received, gave The New York Times evidence that conclusively proved that stealing was going on. In a subsequent interview about the fraud, Tweed's only reply was, "What are you going to do about it?" However, accounts in The New York Times and political cartoons drawn by Thomas Nast and published in Harper's Weekly resulted in the election of numerous opposition candidates in 1871. Tweed is attributed with exclaiming, "Stop them damned pictures. I don't care so much what the papers say about me. My constituents can't read. But, damn it, they can see pictures!"

In October 1871, when Tweed was held on $1,000,000 bail, Jay Gould was the chief bondsman. The efforts of political reformers William H. Wickham (1875 New York City mayor) and Samuel J. Tilden (later 1876 Democratic presidential nominee) resulted in Tweed's trial and conviction in 1873. He was given a 12-year prison sentence, which was reduced by a higher court and he served one year. He was then re-arrested on civil charges, sued by New York State for $6,000,000, and held in debtor's prison until he could post $3,000,000 as bail. On December 4, 1875, Tweed escaped and fled to Cuba. His presence in Cuba was discovered by the U.S. Government and he was held by the Cuban government. Before the U.S. Government could arrange for his extradition, Tweed bribed his way onto a ship headed to Spain. Before he arrived in Spain, the U.S. Government discovered his eventual destination and made arrangements for his arrest as soon as he reached the Spanish coast. The Spanish government identified him, purportedly recognizing Tweed from one of Nast's cartoons, and extradited him to New York; he was delivered to authorities in New York City on November 23, 1876, where he died in the Ludlow Street Jail two years later at the age of 55.

He was buried in Brooklyn's Green-Wood Cemetery.

Boss Tweed was portrayed by Jim Broadbent in the 2002 film Gangs of New York.