When Arthur's mother married Robert Heath, the family moved to Newcastle-upon-Tyne. At the age of twelve Arthur found work at the Robert Stephenson locomotive works. Despite a ten hour day, Arthur attended evening classes in an effort to improve his education.

Henderson had been brought up as a staunch Congregationalist, but in 1879 he was converted by the preacher, Rodney Smith, to Methodism. He became a lay preacher and an active member of the Temperance Society.

After finishing his apprenticeship at seventeen, Arthur Henderson moved to Southampton for a year and then returned to work as a iron moulder in Newcastle-upon-Tyne. Henderson became an active trade unionist and formed a reading a debating society at the Stephenson locomotive works. In 1884 Henderson lost his job and was out of work for fourteen months. Henderson used this time to continue his education and to work as a lay preacher.

In 1892 Henderson was elected as a paid organiser of the Iron Founders Union. Henderson was one of the worker representatives on the North East Conciliation Board. A strong believer in arbitration and industrial co-operation, Henderson opposed the formation of the General Federation of Trade Unions as he believed it would increase the frequency of industrial disputes.

On 27th February 1900, representatives of all the socialist groups in Britain (the Independent Labour Party, the Social Democratic Federation and the Fabian Society, met with trade union leaders at the Memorial Hall in Farringdon Street, London. Arthur Henderson was one of the 129 delegates who decided to pass Hardie's motion to establish "a distinct Labour group in Parliament, who shall have their own whips, and agree upon their policy, which must embrace a readiness to cooperate with any party which for the time being may be engaged in promoting legislation in the direct interests of labour." To make this possible the Conference established a Labour Representation Committee (LRC).

In 1903 Henderson was elected treasurer of the LRC. He was opposed by members of the Independent Labour Party who objected to the fact that Henderson was a liberal rather than a socialist. In a by-election later that year, Henderson was elected as MP for Barnard Castle. Three years later Henderson chaired the conference at which the LRC was transformed into the Labour Party. The party's first Chairman was James Keir Hardie, but in 1908 he was replaced by Henderson.

Ramsay MacDonald became leader of the Labour Party in 1911. However, he resigned the post in 1914 because of his opposition to the First World War. Henderson now became the new leader and in May 1915, became the first member of the Labour Party to hold a Cabinet post when Herbert Asquith invited him to join his coalition government. Henderson was President of the Board of Education (May, 1915 - October, 1916) and Paymaster General (October, 1916 - August, 1917). Henderson resigned as a result of David Lloyd-George, and the war Cabinet voting against his proposal for an International Conference on the war in Stockholm.

Arthur Henderson disagreed with those politicians who believed Germany should be harshly treated after the First World War, and as a result of the nationalist fervour of the 1918 General Election, he lost his seat. He returned to the House of Commons the following year as MP for Widnes. Henderson became chief whip of the party but was defeated at the 1922 General Election.

Elected for East Newcastle at a by-election at two months later, he was defeated once again in the 1923 General Election. He returned at a by-election at Burnley in February 1924 and joined the government headed by Ramsay MacDonald as Home Secretary.

Following Labour's defeat in the 1924 General Election, Philip Snowden and other leading figures in the movement tried to persuade Henderson to stand against MacDonald as leader of the party. Henderson refused and once again became chief whip of the party where he tried to unite the party behind MacDonald's leadership. Henderson was also the main person responsible for Labour and the Nation, a pamphlet that attempted to clarify the political aims of the Labour Party.

After the 1929 General Election victory, Ramsay MacDonald appointed Henderson as his Foreign Secretary. In this post Henderson attempted to reduce political tensions in Europe. Diplomatic relations were re-established with the Soviet Union and Henderson gave his full support to the League of Nations by arguing for international arbitration, de-militarization and collective security.

In 1931 Philip Snowden, the Chancellor of the Exchequer, suggested that the Labour government should introduce new measures to balance the budget. This included a reduction in unemployment pay. Several ministers, including Henderson, George Lansbury and Joseph Clynes, refused to accept the cuts in benefits and resigned from office.

Ramsay MacDonald was angry that his Cabinet had voted against him and decided to resign. When he saw George V that night, he was persuaded to head a new coalition government that would include Conservative and Liberal leaders as well as Labour ministers. Most of the Labour Cabinet totally rejected the idea and only three, Jimmy Thomas, Philip Snowden and John Sankey agreed to join the new government.

In October, MacDonald called an election. The 1931 General Election was a disaster for the Labour Party with only 46 members winning their seats. Henderson lost his seat at Burnley but returned to the House of Commons at a by-election at Clay Cross in September 1933.

Over the next few years Henderson worked tirelessly for world peace. Between 1932 and 1935 he chaired the Geneva Disarmament Conference and in 1934 his work was recognised when he was awarded the Nobel Peace Prize. Arthur Henderson died in London on 20th October, 1935.