Chase was born in Williamsburg (now Nineveh), Indiana, to the family of a local merchant. Chase's father moved the family to Indianapolis in 1861 and employed his son as a salesman in the family business. Chase showed an early interest in art, and studied under local, self-taught artists Barton S. Hays and Jacob Cox.
After a brief stint in the Navy, Chase's teachers urged him to travel to New York to further his artistic training. He arrived in New York in 1869, met and studied with Joseph Oriel Eaton for a short time, then enrolled in the National Academy of Design under Lemuel Wilmarth, a student of the famous French artist Jean-Léon Gérôme.
In 1870 declining family fortunes forced Chase to leave New York for St. Louis, Missouri, where his family was then based. While he worked to help support his family he became active in the St. Louis art community, winning prizes for his paintings at a local exhibition. He also exhibited his first painting at the National Academy in 1871. Chase's talent elicited the interest of wealthy St. Louis collectors who arranged for him to visit Europe for two years, in exchange for paintings and Chase's help in securing European art for their collections.
In Europe Chase settled at the Academy of Fine Arts, Munich, a long-standing center of art training that was attracting increasing numbers of Americans. He studied under Alexander Von Wagner and Karl von Piloty, and befriended American artists Walter Shirlaw, Frank Duveneck, and Joseph Frank Currier. Upon Chase's death, in his Estate auction, he owned more works by Currier than any other artist. In Munich, Chase employed his rapidly burgeoning talent most often in figurative works that he painted in the loosely-brushed style popular with his instructors. In January, 1876, one of these figural works, a portrait titled "Keying Up" (The Court Jester) was exhibited at the Boston Art Club; later that year it was exhibited and won a medal at the Philadelphia Centennial Exposition, and this success gained Chase his first fame.
Chase traveled to Venice, Italy in 1877 with Duveneck and John Henry Twachtman before returning to the United States in the summer of 1878, a highly skilled artist representing the new wave of European-educated American talent. Home in America, he exhibited his painting "Ready for the Ride" with the newly-formed Society of American Artists in 1878. He also opened a studio in New York in the Tenth Street Studio Building, home to many of the important painters of the day. He was a member of the Tilers, a group of artists and authors, among whom were some of his notable friends: Winslow Homer, Arthur Quartley and Augustus Saint Gaudens.
Chase cultivated multiple personnae: sophisticated cosmopolitan, devoted family man, and esteemed teacher. Chase married Alice Gerson in 1886 and together they raised eight children during Chase's most energetic artistic period. His eldest daughters, Alice Dieudonnee Chase and Dorothy Bremond Chase, often modeled for their father
In New York City, however, Chase became known for a flamboyance that he flaunted in his dress, his manners, and most of all in his studio. At Tenth Street, Chase had moved into Albert Bierstadt's old studio and had decorated it as an extension of his own art. Chase filled the studio with lavish furniture, decorative objects, stuffed birds, oriental carpets, and exotic musical instruments. The studio served as a focal point for the sophisticated and fashionable members of the New York City art world of the late 19th century. By 1895 the cost of maintaining the studio, in addition to his other residences, forced Chase to close it and auction the contents.
In addition to his painting, Chase actively developed an interest in teaching. On the urging of a patron, in 1891 Chase opened the Shinnecock Hills Summer School on eastern Long Island, New York, and taught there until 1902. He also opened the Chase School of Art in 1896, which became the New York School of Art two years later with Chase staying on as instructor until 1907. Chase taught at the Pennsylvania Academy of the Fine Arts from 1896 to 1909; the Art Students League from 1878 to 1896 and again from 1907 to 1911; and the Brooklyn Art Association in 1887 and from 1891 to 1896. Along with Robert Henri, who became a rival instructor, Chase was the most important teacher of American artists around the turn of the 20th century. Chase adopted the plein air method of painting, and often taught his students in outdoor classes. His pupils included Charles Demuth, Georgia O'Keefe, and Sheeler.
Chase was a highly prolific artist and his output of more than 2000 paintings included still-lifes, portraits, interiors, and landscapes. Chase worked in all media. He was most fluent in oil painting and pastel, but also created watercolor paintings and etchings. He is perhaps best known for his portraits, his sitters including some of the most important men and women of his time in addition to his own family. Chase often painted his wife Alice and their children, sometimes in individual portraits, and other times in scenes of domestic tranquility: at breakfast in their backyard, or relaxing at their summer home on Long Island, the children playing on the floor or among the sand dunes of Shinnecock. His interest in landscape art may have been spawned by the landmark New York exhibit of French impressionist works from Parisian dealer Durand-Ruel in 1886.
Chase won many honors at home and abroad, was a member of the National Academy of Design, New York, and from 1885 to 1895 was president of the Society of American Artists. He became a member of the Ten American Painters, who included Thomas Dewing and Childe Hassam, after John Henry Twachtman died. Chase's creativity declined in his later years, especially as modern art took hold in America, but he continued to paint and teach into the 1910s. One of his last teaching positions was at Carmel, California in the summer of 1914. Chase died on October 25, 1916 in his New York townhouse, an esteemed elder of the American art world. Today his works are in most major museums in the United States.