At the age of three, Musselwhite moved to Memphis, Tennessee. When he was a teenager, Memphis experienced the period when rockabilly, western swing, and electric blues were combining to give birth to rock and roll. That period featured Elvis Presley, Jerry Lee Lewis, Johnny Cash, and lesser-known musicians such as Gus Cannon, Furry Lewis, Will Shade, and Johnny Burnette. Musselwhite supported himself by digging ditches, laying concrete and running moonshine in a 1950 Lincoln automobile. This environment was a school for music as well as life for Musselwhite, who eventually acquired the nickname Memphis Charlie.

In time, Musselwhite led his own blues band, and after Elektra Records’ success with Paul Butterfield, he released the legendary album Stand Back! Here Comes Charley Musselwhite’s Southside Band in 1966 on Vanguard Records to immediate and great success. He took advantage of the clout this album gave him to move to San Francisco, where, instead of being one of many competing blues acts, he held court as the king of the blues in the exploding countercultural music scene, an exotic and gritty figure to the flower children. Musselwhite even convinced Hooker to move to California.

In 1979, Musselwhite recorded The Harmonica According to Charlie Musselwhite in London for Kicking Mule Records, intended to accompany an instructional book; the album became so popular that it was released on CD. In June 2008, Blind Pig Records reissued the album on 180-gram vinyl with new cover art.

In 1990 Musselwhite signed with Alligator Records, a step that led to a resurgence of his career.

In 1998, Musselwhite appeared in the film Blues Brothers 2000. He played the harmonica in the Louisiana Gator Boys, which featured many other blues and R&B legends, such as B.B. King, Bo Diddley, Eric Clapton, Koko Taylor, Jimmie Vaughan, Dr. John, and Jack DeJohnette.

Musselwhite played on Tom Waits’s 1999 album Mule Variations. He can be heard at the beginning of the song “Chocolate Jesus”, saying “I love it”. Waits has mentioned that this is his favorite part of the song.

In 2002, he was featured on the Bo Diddley tribute album Hey Bo Diddley: A Tribute!, performing the song “Hey Bo Diddley”.

Musselwhite was born in Kosciusko, Mississippi to white parents. Originally claiming to be of partly Choctaw descent, in a 2005 interview he said his mother had told him he was of distant Cherokee descent. His family considered it natural to play music. His father played guitar and harmonica, his mother played piano, and a relative was a one-man band.

Musselwhite lost both of his elderly parents in December 2005, in separate incidents. His mother, Ruth Maxine Musselwhite, was murdered.

Musselwhite was inducted into the Blues Hall of Fame in 2010. The same year, he appeared on the JW-Jones recording “Midnight Memphis Sun”, along with Hubert Sumlin. Also in 2010, he released the album The Well. In the title song he credits Jessica McClure’s ordeal as a child trapped in a well for over 58 hours in 1987 for inspiring him to quit drinking, stating,

In 2012, Musselewhite released the live album Juke Joint Chapel (recorded at the Shack Up Inn in Clarksdale, MS) which was nominated for a Grammy for Best Traditional Blues Album. Musselwhite also teamed with Ben Harper to record the album Get Up!, which was released in January 2013. In January 2014, it won a Grammy Award for Best Blues Album.

In 2014 and 2015, he won a Blues Music Award in the category Best Instrumentalist – Harmonicist.

At the 40th Blues Music Awards ceremony in 2019, Musselwhite’s joint composition with Ben Harper, “No Mercy In This Land”, was named as ‘Song of the Year’.