Townsend was born in Shelby, Mississippi and grew up in Cairo, Illinois. He left home at the age of nine because of an abusive father and hoboed his way to St. Louis, Missouri. By the late 1920s he had begun touring and recording with pianist Walter Davis, and had acquired the nickname "Mule" because he was sturdy in both physique and character.

Townsend was one of the only artists known to have recorded in every decade for the last 80 years. Townsend died at the age of 96, on September 24, 2006, at St. Mary's Ozaukee Hospital, Mequon, Wisconsin, just hours after having been the first person to be presented with a 'key' in Grafton's Paramount Plaza Walk of Fame. On February 10, 2008, Henry Townsend posthumously received a Grammy Award at the 50th Annual Grammy Awards in the Best Traditional Blues Album category for his performances on Last of the Great Mississippi Delta Bluesmen: Live In Dallas released by The Blue Shoe Project.