Adams was born into a family with a long legacy in American public life. He was the great-grandson of both United States President John Adams and United States Secretary of the Navy Benjamin Williams Crowninshield, and the grandson of president John Quincy Adams. His father was a lawyer, politician, diplomat, and writer.
After graduating from Harvard University in 1856, Adams served on the Union side in the American Civil War, serving initially as a captain in a Massachusetts cavalry regiment. He fought with distinction during the Gettysburg Campaign, where his company was heavily engaged at the Battle of Aldie. He received the brevet rank of brigadier-general in the Regular Army in 1865.
Following the Civil War, he was appointed to the Massachusetts Railroad Commission. There he attempted to persuade (rather than coerce) railroads into compliance with accepted business norms. Thomas McCraw called Adams's approach to regulation "the Sunshine Commission" since the purpose of the commission was to expose the corrupt business practices in hopes that, once out in the open, the businessmen would be shamed into mending their ways. It was in this vein that he wrote Chapters of Erie. However, true to his regulatory philosophy, he favored the protection of businessmen over that of the consumers. He saw regulation as necessary to protect investors and other businessmen from the capriciousness of a hostile public or the machinations of other unscruplous stock jobbers.
Charles Francis Adams III was the son of John Quincy Adams II and the nephew of Charles Francis Adams Jr.