Rutledge was born in Cloverport, Kentucky (more specifically, at nearby Tar Springs) to Wiley Blount Rutledge, Sr., a Southern Baptist minister, and Mary Lou Wigginton Rutledge (d. 1903). Another son died in infancy, and then his sister Margaret was born in 1897. His family moved about while he was young, but he attended college at Maryville College and then the University of Wisconsin-Madison, graduating from there in 1914. Rutledge taught high school in Indiana while attending the Indiana University law school part-time. He later moved to Colorado, and received a degree from the University of Colorado School of Law in Boulder. While matriculating at Colorado, Rutledge joined the Pi Chapter of Alpha Sigma Phi Fraternity.
On August 28, 1917, Rutledge married Annabel Person. The couple had three children: Mary Lou (1922), Jean Ann (1925), and Neal (1927).
Rutledge worked in private practice in Boulder for a few years before deciding to instead pursue an academic career. He taught at a number of law schools before being named Dean of the University of Iowa College of Law in 1935. From this position, Rutledge was a vocal supporter of Franklin Roosevelt's plan to pack the Supreme Court. Rutledge also served as Dean of Washington University School of Law from 1930-1935, where the Wiley Rutledge Moot Court competition is named in his honor.
Roosevelt appointed Rutledge to the United States Court of Appeals for the District of Columbia Circuit in 1939, and Rutledge quickly demonstrated strong liberal tendencies, particularly in his interpretation of the due process clause of the Fourteenth Amendment. Roosevelt nominated Rutledge to the United States Supreme Court in 1943, where Rutledge continued his liberal leanings. Among other things, he wrote for the court “[O]ur Government is not one of mere convenience or efficiency. It too has a stake, with every citizen, in his being afforded our historic individual protections, including those surrounding criminal trials. About them we dare not become careless or complacent when that fashion has become rampant over the earth.” Kotteakos v. United States, .
According to Justice Frankfurter, Rutledge was part of the more liberal "Axis" of justices on the Court, along with Justices Murphy, Douglas, and Black; the group would for years oppose Frankfurter's judicially-restrained ideology. Douglas, Murphy, and then Rutledge were the first justices to agree with Hugo Black's notion that the Fourteenth Amendment incorporated the Bill of Rights protection into it; this view would later become law.
Rutledge served on the court until his death. On August 27, 1949, Rutledge was vacationing in Maine. He had a stroke while driving his car and died two weeks later, aged fifty-five. One of Rutledge's law clerks, John Paul Stevens, would himself become a Supreme Court justice, in 1975.