Born at Marlboro, Vermont, Knight was the son of Joseph Knight, Sr. and Polly Peck. When Newel was about eight years old his family moved to Colesville, New York. He married Sally Colburn on the June 7, 1825.
Knight was baptized into the Church of Christ, the original name of the Latter Day Saint church founded by Joseph Smith, in May 1830. Prior to this, Joseph Smith cast an evil spirit out from Knight, which is considered by some to be the first miracle performed in the history of the Latter Day Saint movement. Shortly after this Knight had a vision of heaven.
With the baptism of Knight's parents, siblings, and aunts and uncles in July 1830, the Colesville Branch of the church was organized with Knight as its presiding authority. He continued to preside over this branch through its relocation to Ohio and then to Jackson County, Missouri.
When the second high council of the church was organized in Missouri in 1834, Knight was appointed a member of it. He would serve on three more high councils.
In September 1834 Knight's wife Sally died. On the November 24, 1835 Knight married Lydia Goldthwaite Bailey at Kirtland, Ohio. This was the first marriage performed by Joseph Smith.
In both Missouri and later at Nauvoo, Illinois, Knight constructed mills. In 1846–1847, Knight was part of the Ponca Encampment, led by George Miller. Knight died at Ponca (in what is today Knox County, Nebraska) from lung inflammation, probably pneumonia.
His widow Lydia gave birth to Newel's ninth child, Jesse Knight, seven months after Newel died. She brought the family to Utah in 1850.