Monroe was born on his family's farm in Rosine, Kentucky; he was the older brother of the mandolin player Bill Monroe. His sister Bertha also played guitar, and brother Birch, fiddle. Charlie, Birch, and Bill played together as a band in the middle of the 1920s, and played on radio starting in 1927. Soon after this, however, their parents died and Charlie and Birch moved to Detroit and then Indiana to find work, eventually taking jobs in oil refineries near Hammond, Indiana. Bill followed them into the oil business in 1929, and the three continued performing in small-time and private venues.
Tom Owens, a musician on the WSL Barn Dance radio program, heard them play at a dance club in 1932 and asked them to join his group as dancers. They accepted, and toured with Owens for the next two years. In 1934, they once again got offers to play music, this time for Indiana radio stations WAE and WJKS. Not long after this, Texas Crystals, a pharmaceutical company, offered to sponsor the Monroes for a radio program of their own. When Birch refused the offer, Bill and Charlie took the bill as The Monroe Brothers. The resulting program was so successful that it eventually became a daily broadcast on Charlotte, North Carolina station WBT.
Texas Crystals dropped the sponsorship in 1936, but Crazy Water Crystal Company picked it up, and the brothers continued with the show. That same year, the brothers first recorded together for Bluebird Records. Bill and Charlie recorded together for the next two years, but Bill chafed under Charlie's role as the usual lead singer, and they split in 1938. Each then formed his own band, with Bill starting The Kentuckians and Charlie the Kentucky Pardners. A number of noted bluegrass musicians played with Charlie's band, including Lester Flatt, Red Rector, Curly Seckler, Fiddlin Dale Cole and Ira Louvin. The Kentucky Pardners enjoyed considerable success as a touring outfit in the American South throughout the 1940s.
Charlie signed with RCA Victor in 1946 and with Decca Records in 1950; he wrote and recorded a large body of material and continued to tour relentlessly until he announced his retirement in 1957. He moved back to his farm and, after the death of his first wife, worked in manual labor in Indiana again. He remarried in 1969.
Monroe was asked by Jimmy Martin to play at the Gettysburg Bluegrass Festival in 1972. His performance was a great success. He continued to play festivals until diagnosed with cancer in 1974; he died at his farm in Reidsville, North Carolina in 1975 and was buried in his family's plot.