Halliday was born and raised in England. He took a BA Honours degree in Modern Chinese Language and Literature (Mandarin) at the University of London. He then lived for three years in China, where he studied under Luo Changpei at Peking University and under Wang Li at Lingnan University, before returning to take a PhD in Chinese Linguistics at Cambridge. Having taught Chinese for a number of years, he changed his field of specialisation to linguistics, and developed systemic functional grammar, elaborating on the foundations laid by his British teacher J. R. Firth and a group of European linguists of the early 20th century, the Prague School. His seminal paper on this model was published in 1961. He became the Professor of Linguistics at the University of London in 1965. In 1976 he moved to Australia as Foundation Professor of Linguistics at the University of Sydney, where he remained until he retired. The impact of his work extends beyond linguistics into the study of visual and multimodal communication, and he is considered to have founded the field of social semiotics. He has worked in various regions of language study, both theoretical and applied, and has been especially concerned with applying the understanding of the basic principles of language to the theory and practices of education. He received the status of emeritus professor of the University of Sydney and Macquarie University, Sydney, in 1987, and is currently Distinguished Visiting Professor in the Faculty of Education, University of Hong Kong. With his seminal lecture "New Ways of Meaning: the Challenge to Applied Linguistics" held at the AILA conference in Saloniki (1990), he became one of the pioneers of eco-critical discourse analysis (a discipline of ecolinguistics).
Halliday (1975) identifies seven functions that language has for children in their early years. Children are motivated to acquire language because it serves certain purposes or functions for them. The first four functions help the child to satisfy physical, emotional and social needs. Halliday calls them instrumental, regulatory, interactional, and personal functions.
The next three functions are heuristic, imaginative, and representational, all helping the child to come to terms with his or her environment.