Tate was born in Chorley, Lancashire, the son of a clergyman. When he was 13, he became a grocer's apprentice in Liverpool. After a seven-year apprenticeship, he was able to set up his own shop. His business was successful, and grew to a chain of six stores by the time he was 35.
In 1859 Tate became a partner in John Wright & Co. sugar refinery, and he sold his groceries in 1861. By 1869, he had gained complete control of the company, and renamed it to Henry Tate & Sons. In 1872, he purchased the Langen patent on a method of making sugar cubes, and in the same year built a new refinery in Liverpool.
Tate rapidly became a millionaire, and donated generously to charity. In 1889 he donated his collection of 65 contemporary paintings to the government, on the condition that they be displayed in a suitable gallery, toward the construction of which he also donated £80,000. The National Gallery of British Art, better known as the Tate Gallery, was opened on July 21, 1897, on the site of the old Millbank prison. Tate was made a baronet in 1898.
In 1921, after Tate's death, Henry Tate & Sons merged with Abram Lyle & Sons to form Tate and Lyle.