Hayden was born Asa Bundy Sheffey in Detroit, Michigan, to Ruth and Asa Sheffey (who separated before his birth). He was taken in by a foster family next door, Sue Ellen Westerfield and William Hayden, and grew up in a Detroit ghetto nicknamed "Paradise Valley". The Haydens' perpetually contentious marriage, coupled with Ruth Sheffey’s competition for young Hayden's affections, made for a traumatic childhood. Witnessing fights and suffering beatings, Hayden lived in a house fraught with chronic anger, whose effects would stay with the poet throughout his adulthood. On top of that, his severe visual problems prevented him from participating in activities such as sports in which nearly everyone else was involved. His childhood traumas resulted in debilitating bouts of depression that he later called "my dark nights of the soul."
Because he was nearsighted and slight of stature, he was often ostracized by his peer group. As a response both to his household and peers, Hayden read voraciously, developing both an ear and an eye for transformative qualities in literature. He attended Detroit City College (Wayne State University), and left in 1936 one credit short of finishing his degree during the Great Depression and went to work for the Federal Writers' Project, where he researched black history and folk culture.
After leaving the Federal Writers' Project in 1938, marrying Erma Morris in 1940, and publishing his first volume, Heart-Shape in the Dust (1940), Hayden enrolled at the University of Michigan in 1941 and won a Hopwood Award there. Raised as a Baptist, he became a member of the Bahá'í Faith during the early 1940s after his wife, and raised a daughter, Maia, in the religion, and became one of the best-known Bahá'í poets. Erma Hayden was a pianist and composer and served as supervisor of music for Nashville public schools.
In pursuit of a master's degree, Hayden studied under W. H. Auden, who directed Hayden's attention to issues of poetic form, technique, and artistic discipline, and influence may be seen in the "technical pith of Hayden's verse". After finishing his degree in 1942, then teaching several years at Michigan, Hayden went to Fisk University in 1946, where he remained for twenty-three years, returning to Michigan in 1969 to complete his teaching career.
A great supporter of the religion's teaching of the unity of humanity, Hayden could never embrace Black separatism. Thus the title poem of Words in the Mourning Time ends in a stirring plea in the name of all humanity:
Reclaim now, now renew the vision of
a human world where godliness is possible and man is neither gook nigger honkey wop or kike but manpermitted to be man.
He died in Ann Arbor, Michigan, in 1980, age 66.
In 2012 the U.S. Postal Service issued a pane of stamps featuring ten great Twentieth Century American Poets, including Hayden.