Lang was born in 1844 in Selkirk, Scottish Borders. He was the eldest of the eight children born to John Lang, the town clerk of Selkirk, and his wife Jane Plenderleath Sellar, who was the daughter of Patrick Sellar, factor to the first Duke of Sutherland. On 17 April 1875, he married Leonora Blanche Alleyne, youngest daughter of C. T. Alleyne of Clifton and Barbados. She was (or should have been) variously credited as author, collaborator, or translator of Lang’s Color/Rainbow Fairy Books which he edited.

He was educated at Selkirk Grammar School, Loretto School, and the Edinburgh Academy, as well as the University of St Andrews and Balliol College, Oxford, where he took a first class in the final classical schools in 1868, becoming a fellow and subsequently honorary fellow of Merton College. He soon made a reputation as one of the most able and versatile writers of the day as a journalist, poet, critic, and historian. He was a member of the Order of the White Rose, a Neo-Jacobite society which attracted many writers and artists in the 1890s and 1900s. In 1906, he was elected FBA.

Lang selected and edited 25 collections of stories that were published annually, beginning with The Blue Fairy Book in 1889 and ending with The Strange Story Book in 1913. They are sometimes called Andrew Lang’s Fairy Books although the Blue Fairy Book and other Coloured Fairy Books are only 12 in the series. In this chronological list the Coloured Fairy Books alone are numbered.

He also wrote monographs on The Portraits and Jewels of Mary Stuart (1906) and James VI and the Gowrie Mystery (1902). The somewhat unfavourable view of John Knox presented in his book John Knox and the Reformation (1905) aroused considerable controversy. He gave new information about the continental career of the Young Pretender in Pickle the Spy (1897), an account of Alestair Ruadh MacDonnell, whom he identified with Pickle, a notorious Hanoverian spy. This was followed by The Companions of Pickle (1898) and a monograph on Prince Charles Edward (1900). In 1900 he began a History of Scotland from the Roman Occupation (1900). The Valet’s Tragedy (1903), which takes its title from an essay on Dumas’s Man in the Iron Mask, collects twelve papers on historical mysteries, and A Monk of Fife (1896) is a fictitious narrative purporting to be written by a young Scot in France in 1429–1431.

Lang was one of the founders of “psychical research” and his other writings on anthropology include The Book of Dreams and Ghosts (1897), Magic and Religion (1901) and The Secret of the Totem (1905). He served as President of the Society for Psychical Research in 1911.

He died of angina pectoris on 20 July 1912 at the Tor-na-Coille Hotel in Banchory, Banchory, survived by his wife. He was buried in the cathedral precincts at St Andrews, where a monument can be visited in the south-east corner of the 19th century section.