Chancellor, a native of Bristol, acquired geographical and maritime proficiency from the explorer Sebastian Cabot and the geographer John Dee. Cabot had always been interested in making a voyage to Asia through the Arctic, and for this purpose King Edward VI chartered an association of English merchants, the Company of Merchant Adventurers in 1552-1553, with the Duke of Northumberland as principal patron. They hoped not only to discover a North-East Passage but also to find a market for English woollen cloth.
Sir Hugh Willoughby was given three ships for the search, and Chancellor went as second-in-command. A Norwegian coastal storm separated them; Willoughby, with two ships, sailed east and discovered Novaya Zemlya but died with all his men on the Lapland coast. Chancellor, with the ship Edward Bonaventure, found the entrance to the White Sea and anchored at the port of Archangel. When Tsar Ivan the Terrible heard of Chancellor's arrival, he immediately invited the exotic guest to visit Moscow for an audience at the royal court. Chancellor made the journey of over 600 miles (over 1000 kilometres) to Moscow through snow and ice covered country. He found Moscow large (much larger than London) and primitively built, most houses being constructed of wood. However, the palace of the tsar was very luxurious, as were the dinners he offered Chancellor. The Russian tsar was pleased to open the sea trading routes with England and other countries, as Russia did not yet have a connection with the Baltic Sea at the time and the entire area was contested by the neighbouring powers of the Polish-Lithuanian Commonwealth and the Swedish Empire. In addition, the Hanseatic League had a monopoly on the trade between Russia and Central and Western Europe. Chancellor was no less optimistic, finding a good market for his English wool, and receiving furs and other Russian goods in return. The Tsar gave him letters for England inviting British traders and promising trade privileges.
When Chancellor returned to England in the summer of 1554, King Edward was dead, and his successor, Mary, had executed Northumberland for attempting to place Lady Jane Grey on the throne. No stigma attached to Chancellor, and the Muscovy Company, as the association was now called, sent him again to the White Sea in 1555. On this voyage he learned what had happened to Willoughby, recovered his papers, and found out about the discovery of Novaya Zemlya. Chancellor spent the summer of 1555 dealing with the Tsar, organizing trade, and trying to learn how China might be reached by the northern route.
In 1556 Chancellor departed for England, taking with him the first Russian ambassador to his country, Osep Nepeja. They left Archangel in autumn; the fleet was Willoughby's ships (relaunched), the Philip and Mary and the Edward Bonadventure. In October/November the fleet tried to winter in Trondheim. The Bona Esperanza sank, the Bona Confidentia appeared to enter the fjord but was never heard of again, and the Philip and Mary successfully wintered in Trondheim and arrived in London next April the 18th. The Edward did not attempt to enter, instead reaching the Scottish coast and being wrecked at Pitslago on the 7th of November. Chancellor lost his life, although the Russian envoy survived to reach London.
Chancellor had found a way to Russia, and though in time it was superseded by a better one it remained for years the only feasible route for the English.