He was of Huntingdonshire parentage and educated at Westminster School and Jesus College, Cambridge. He had become interested in antiquarian studies under William Camden, and began to amass a library. He entered Parliament as a member for Huntingdon in 1601. He helped devise the institution of the title baronet as a means for King James I of England to raise funds. Despite his early period of goodwill with James I, during which he was made a baronet, Cotton's politics became anti-royalist in nature and the authorities began to fear the uses of his library, which was confiscated in 1630 and returned only after his death to his heirs.
The Cottonian Library, the richest private collection of manuscripts ever amassed, was eventually donated to the nation by Cotton's grandson and now resides at the British Library.