After a short period in the army, Sharpe joins the RAND Corporation in 1956 as an economist. During this period path-breaking work in computer science, game theory, linear programming, dynamic programming and applied economics are done at RAND. Among other things, Sharpe learns computer programming there.

In 1940, his father joins the National Guard and the family moves first to Texas, then to California. Sharpe attends school in Riverside.

William Forsyth Sharpe is born in Boston, Massachusetts.

Sharpe first enrolls at the University of California at Berkeley, aiming towards a medical degree.

He is married, since 1986, to the painter Kathryn Sharpe.

While at RAND, he studies for a PhD at UCLA, receiving his degree in 1961.

He changes his major to Economics and completes his Master of Arts in 1956. At UCLA, Sharpe first comes across the work of Markowitz. Two professors have a great influence on his career: J. Fred Weston and Armen Alchian.

He accepts a position at the Stanford University Graduate School of Business.

After a year, however, he transfers to the University of California at Los Angeles (UCLA) to major in Business Administration, gaining a BA in 1955.

He moves to the School of Business at the University of Washington, Seattle. There he starts the work that grew into the CAPM (Capital Asset Pricing Model), a financial model that explains how securities prices reflect potential risks and returns. He spends one year on leave at RAND. In Seattle, he teaches microeconomics, finance, computer science, statistics, and operations research. 

William Sharpe shares the 1990 Nobel Prize in Economics with Harry Markowitz and Merton Miller for their pioneering work in the theory of financial economics. Financial markets serve a key purpose in a modern market economy by allocating resources among various areas of production. Financial markets also reflect firms' expected prospects and risks.

After taking a two-year leave to set up the Sharpe-Russell Research consultancy firm (now William F. Sharpe Associates), he retires as professor in 1989 to concentrate on his business, retaining the position of Professor Emeritus of Finance at Stanford. In 1996 he co-founds Financial Engines, a firm that provides online investment advice to individuals.

Sharpe moves to the University of California at Irvine, to participate in an experiment involving the creation of a School of Social Sciences with an interdisciplinary and quantitative focus. His expectations are not fulfilled, so he leaves after two years.