Hamilton was born on February 16, 1866 in Newark, New Jersey. His parents, Samuel and Mary Hamilton, had immigrated to New Jersey from Ireland. Biographer Roy Kerr writes that evidence suggests that Hamilton was descended from the Ulster Scots people. (As an adult, Hamilton was known to proudly proclaim his Scottish ancestry.) When Hamilton was a small child, his family moved to Clinton, Massachusetts. He worked in a Clinton cotton mill as a young teenager.
Hamilton broke into the major leagues in the American Association with the Kansas City Cowboys in 1888. He established himself as a star the following season by batting .301 with 144 runs and 111 stolen bases. In 1890, the Cowboys, who were ceasing operations, sold Hamilton to the Philadelphia Phillies. The next year he led the NL in batting average (.340), runs scored (141) and hits (179). For a third consecutive season, Hamilton led the NL in stolen bases.
In 1892, Hamilton hit both a leadoff and walk-off home run in the same game. Only Vic Power (1957), Darin Erstad (2000), Reed Johnson (2003) and Ian Kinsler (2009) have accomplished the same feat. He hit .380 in 1893, which led the major leagues.
Philadelphia outfielders Hamilton, Sam Thompson, Ed Delahanty and Tuck Turner all hit over .400 in 1894. That year Hamilton set the all-time standard for most runs scored in a season (198); since then, Babe Ruth has come closest to Hamilton in runs scored, with 177 in 1921, setting the American League and modern MLB record. Hamilton also set the record for most stolen bases in one game, with seven on August 31, 1894. He set the record for most consecutive games scoring one or more runs, with 35 runs in 24 games in July–August 1894.
Hamilton led the league in steals for a fifth time in 1895. In 1896, Hamilton moved to Boston, for whom he played his final six seasons. Although his numbers declined, Hamilton still scored over 100 runs in all but two of those seasons. Hamilton retired after the 1901 season.
He is the Philadelphia Phillies career leader in batting average (.361), on-base percentage (.468) and stolen bases (508). He holds Phillies single-season records for on-base percentage (.523 in 1894), runs (196 in 1894), stolen bases (111 in 1891) and times on base (355 in 1894).
Though stolen bases were credited differently during Hamilton's career than they are in modern times, he was very proud of his stolen base marks. In 1937, Hamilton lambasted the Sporting News in a letter he wrote to them, stating, "I was and will be the greatest base stealer of all time. I stole over 100 bases on many years and if they ever re-count the record I will get my just reward." 
His career steals total differs, based on the source. Hamilton's plaque in the Baseball Hall of Fame credits him with 937 steals, while MLB.com credits him with 912 steals and Baseball Reference.com credits him with 914 steals.
Hamilton was named the starting left fielder of the Phillies all-time team in the John J. Rust book "The Best Phillies Team Ever."