Ferguson was born near Salado, Texas. At the age of 16, he left home and drifted though the states of the American Old West. After he returned to Texas, he was admitted to the bar. He married Miriam A. "Ma" Wallace on December 31, 1899. During the 1900s and 1910s, Ferguson ran several local campaigns.
After being re-elected in 1916, Ferguson vetoed the appropriations for the University of Texas. This was in retribution for the university's refusal to dismiss certain faculty members which Ferguson found objectionable. This move spurred the drive to impeach Ferguson. A leading Ferguson critic on the UT campus was historian Eugene C. Barker. Ferguson was indicted on nine charges in July 1917. The Texas House of Representatives prepared twenty-one charges against Ferguson and the Senate convicted him on ten of those charges. The Senate removed him from the office of Governor and declared him ineligible to hold office in the state of Texas. Despite this ruling, Ferguson ran for Governor in 1918 but he was defeated by William P. Hobby.
Ferguson also ran for President of the United States in the 1920 election as the candidate of the American Party. Ferguson was on the ballot in only Texas, where he received 47,968 votes (9.86% of the vote in Texas, 0.18% of the vote nationwide). The election was won by Republican candidate Warren Gamaliel Harding.
Ferguson was also surpassed by four other unsuccessful candidates:
He failed at his bid for the United States Senate in 1922, making it to the runoff election but losing to Earle B. Mayfield. Ferguson ran the campaigns of his wife Miriam A. Ferguson, who was elected to two terms as Governor of Texas (January 20, 1925 - January 17, 1927 and January 17, 1933 - January 15, 1935).