Dr. Sharma was born in Bhopal, Madhya Pradesh. He received his education at St. John's College, Agra, Allahabad University, Lucknow University, Fitzwilliam College, Cambridge University, Lincoln's Inn and Harvard Law School. He completed his M.A. Degrees in English Literature, stood first for Hindi and Sanskrit in the University. He obtained his LL.M. from Lucknow University once again standing first in the University. He obtained his Ph.D. in Law at Cambridge.
He has been elected Honorary Bencher and Master of Lincoln's Inn and Honorary Fellow, Fitzwilliam College, Cambridge. The University of Cambridge has honoured him with degree of Doctor of Law (Honoris Causa). Dr. Sharma was married to Vimala Sharma. Dr. Sharma was awarded the Chakravarti Gold Medal for Social Service by Lucknow University. During the 1940s he was involved in the Indian freedom struggle from Britain, and joined the Indian National Congress, a party which he remained loyal for the rest of his life.
During the 1960s Sharma supported quest for leadership of the Congress Party. From 1974-77 he served in Indira Gandhi's cabinet as the minister for Communication. In 1984 he began serving as governor of Indian states, first in Andhra Pradesh. In 1985 he became the governor of Punjab during a time of violence between the Indian government and Sikh militants. He assumed his final governorship in Maharashtra in 1986 and remained governor until 1987. He was elected for a 5-year term as Vice-President of India and chairman of the Rajya Sabha.
Sharma was known to be a stickler for parliamentary norms. Shankar Dayal Sharma served as Vice-President until 1992, when he was elected President. During his five-year term, he was active in formal matters and was in charge of dismissing and appointing governors. He did not run for a second term as President. During the last five years of his life, Sharma suffered from ill health. He was cremated near the Vijay Ghat.