Gray was born in Fairfield, NY, on September 8, 1810. In 1926, his father died and Gray became apprentice to a cabinetmaker in Springfield, NY. He moved to Utica, NY at age 21. Though there are conflicting accounts as to Gray’s educational status, most agree that he was informally trained in medicine and theology. During his medical training, he contracted an incurable disease that left him with a weakened lung. In 1831, Gray joined the Presbyterian Church, in which his brother was a minister. Later, Gray was appointed to the Oregon Mission of the American Board by his friend, Rev. Chauncey Eddy. In 1835, Gray was offered a position with the Whitman party and left his fiancée in Utica to join the Whitmans and Spaldings who had already traveled to Liberty, Missouri, where they gathered supplies. According to accounts from letters, Gray was the motivator in the party and woke everyone up in the early morning to keep the team moving.

Gray, the Spaldings, and the Whitmans arrived at Fort Walla Walla on Oct 2, 1836. It was assumed by Spaldings and the Whitmans that Gray would conduct most of the manual labor, while the more educated men would conduct mission work. Gray, however, did not stay long at the two mission sites and returned east in the spring with a party of four Nez Perce. According to accounts, their party was captured by the Sioux; the guides were killed, and Gray was taken prisoner and removed to Canada. He was rescued by members of the Hudson Bay Company. Upon his return to New York, he married Mary Augusta Dix and they returned west, leading the Walker-Eels party in 1838.

Gray was involved both politically and financially in the establishment of Oregon. Gray remained at the Whitman’s Waiilatpu Mission for a time and then moved to Salem, Oregon, where he secured manual employment by building Willamette University. Afterward, Gray moved to Klatsop Plains, just north of Astoria, and built the first Presbyterian Church west of the Rockies. Gray served as the secretary of the Champoeg meetings, the provisional government in pre-state of Oregon. After the establishment of an official government, he served as a member of the territorial legislature. Gray studied transportation engineering and was on the vanguard of river travel. In 1858, he pioneered the Fraiser River in British Columbia with model boats and sloops. From 1860-1861, Gray built a model boat, 91 feet long and 12 feet wide, and piloted it down the entire length of Okanogan River to the Columbia River, where his journey ended near Celilo Falls.

Gray and his family moved to the Dalles in 1864, where Gray build the steamer, Cesadilla. He spent his later life writing the "History of Oregon", and securing funds to erect a monument at Waiilatpu to honor Marcus and Narcissa Whitman. In addition, he was involved in the Pioneer and Historical Society of Oregon, where he served as secretary for a number of years.

His wife, Mary Augusta Dix Gray, died in 1881. Gray’s death followed in 1889. William H. and Mary Augusta Dix Gray were buried at Klastop plains, and later their remains were moved to the memorial site of the Waiilitpu mission.