Sterling was born February 11, 1875 in Anahuac, Chambers County, Texas. He grew up on a farm and, after little formal education, began working as a clerk at the age of twelve. At the age of 21 he started his own merchandising business, and in 1911 he organized the Humble Oil Company.
In addition to oil, Sterling was also involved in a railroad, a newspaper, banking, and real estate in the Houston area, and was an active member of the Houston Port Commission. He served as chair of the Texas Highway Commission under Governor Dan Moody.
Sterling defeated former governor Miriam "Ma" Ferguson and several other candidates in the 1930 race for governor. During Sterling's term in office, the East Texas oil fields experienced rapid and uncontrolled development. The Railroad Commission of Texas attempted proration, but the courts struck the plan down. Because of the chaotic situation, Sterling declared martial law in four counties for six months. National Guard troops were sent to the oil fields to limit waste and control production. This action was later declared unwarranted by the federal district court and the U.S. Supreme Court, and the Railroad Commission's plan for proration was accepted. Cotton prices also suffered during Sterling's term in office.