Stanley was born in Big Spraddle Creek, part of Dickenson County, Virginia. The son of Lucy and Lee Stanley, Carter grew up in rural southwestern Virginia. Along with his brother Ralph Stanley, he formed The Stanley Brothers, one of the most revered brother act in bluegrass. Carter played guitar and sang lead while Ralph played banjo and sang with a strong, high tenor voice. Their harmonies are much admired, and many consider Carter Stanley to be one of the greatest singers in the history of country music. Carter also wrote many of their songs, several of which have become standards of the bluegrass genre, and had a particular knack for deceptively simple lyrics that portrayed strong emotion.
The Stanleys stayed together as one of the last great brother acts until the end, when Carter coughed up blood during a performance at a school auditorium in Hazel Green, Kentucky. Six weeks later, on December 1 1966, he was dead of cirrhosis of the liver at forty-one, after years of chronic alcoholism. He was buried, as per his final wish, on Smith Ridge, near Coeburn, Virginia.
In 1992 he was posthumously inducted into the International Bluegrass Music Hall of Honor.