Born in a prominent Kayastha family in Shrinagar, Porbandar, Prasad took his early education in Chhapra and Patna before moving to Presidency College in Calcutta, where he completed his legal training. In between he married to Phool Devi. He set up a legal practise in Darbhanga and had two sons Vishwa Nath and Shiv Nath Prasad, more commonly known as SN Prasad, and two daughters, Prabhavati Devi and Vidyawati. Prabhavati Devi was married to Jayaprakash Narayan and Vidyawati to Mrityunjaya Prasad, son of Rajendra Prasad.
He met with Mahatma Gandhi in 1915 and was immediately taken in by him. He decided to get involved full-time in the freedom struggle and gave up his legal practice. He was instrumental in Gandhi taking up the Champaran and Kheda Satyagraha, in which Gandhi handpicked Rajendra Prasad and Anugrah Narayan Sinha along with him to successfully lead the movement. Gandhi was so impressed by Prasad's dedication that he set aside a full chapter on him in his autobiographical book, The Story of My Experiments with Truth, called "The Gentle Bihari".
He remained at the forefront of the freedom struggle in Bihar, and his collaboration with several colleagues was instrumental in the setting up of the Bihar Vidyapeeth. For the last ten years of his life he was severely infirmed, and died in 1946.
- Kamat. "Biography: Anugrah Narayan Sinha". Kamat's archive. Retrieved 2006-06-25.
- s:The Story of My Experiments with Truth/Part V/The Gentle Bihari