Pease, the sixth of fifteen children, was born near Bristol, the son of devout Quakers, Thomas Pease (1816-1884) and Susanna Ann Fry (1829-1917) sister of Edward Fry, the judge. He was educated at home until he was sixteen, and soon after moved to London where he soon became a successful stock-broker. In the early 1880s Pease became friends with Frank Podmore and husband and wife Edith Nesbit and Hubert Bland. In 1884, the group founded the Fabian Society.
In 1886, the death of a wealthy relative meant Pease received a sizeable legacy allowing him to give up work at the London Stock Exchange and devote time to his socialist interests. In 1886, he moved to Newcastle-upon-Tyne, began working as a cabinet-maker and formed a branch of the National Labour Federation. However, his attempts to convert the working class to socialism were unsuccessful so he returned to London. He travelled to America with Sidney Webb in 1888, and on his return married Marjory Davidson, a young Scottish schoolteacher.
In 1890 Pease was appointed secretary of the Fabian Society. As well as managing the society's administration, he edited Fabian News and wrote ten pamphlets, including tracts on liquor licensing (1899) and The History of the Fabian Society (1916).
Pease was also a member of the Independent Labour Party and in February 1900 he represented the Fabian Society at the meeting where it was decided to establish "a distinct Labour group in Parliament", forming the Labour Representation Committee (LRC - the forerunner to the Labour Party) to which Pease was elected, serving on the Party's executive committee for 14 years.
Pease married Mary (Marjory) Gammell Davidson (1861-1950). They had two children: Michael S. Pease, the geneticist, and Nicholas Arthington Pease.
With his wife Marjory, Pease established the East Surrey Labour Party and both served on the local council. Their home at Limpsfield, The Pendicle, Pastens Road, became known as 'Dostoevsky Corner', because he housed so many Russian refugees who had been forced to leave their country because of their socialist beliefs.