Pirrie was born of Ulster parents in Quebec, Canada, on 31 May 1847. He spent his childhood at Conlig, Co Down, and at fifteen was apprenticed to the Harland & Wolff shipyard in Belfast. He worked his way through different departments, and in 1874 was taken into partnership by the two founders of the firm, Sir Edward Harland and G. W. Wolff. Pirrie succeeded Harland as the shipyard's driving force, and was for many years its chairman. Modern steel-making revolutionised shipbuilding, and Pirrie was at the forefront of development in marine engineering and naval architecture, particularly in building large ships such as the 46,000-ton Olympic (1911) and the 48,000-ton Britannic (1914). Harland had formed a connection with the new White Star Line in 1869, and Pirrie's 'floating hotels' maintained their supremacy in the North Atlantic. His own extensive travels helped him to understand passengers' needs; only illness prevented him joining the Titanic on her ill-fated maiden voyage in 1912.

Both founders of the shipyard had become MPs. Pirrie chose instead to serve on Belfast Corporation, becoming lord mayor in 1896-7. He was active in extending the city's boundary, beginning a new City Hall, and launching a scheme to build what became the Royal Victoria Hospital. His Unionist views had so weakened that he was refused nomination as a Unionist parliamentary candidate in 1902; backing Liberal candidates in the 1906 election, he soon became Baron Pirrie.

Pirrie's support for the 1912 Home Rule Bill made him unpopular in Belfast, and he was jeered in the streets after chairing a famous meeting of the Ulster Liberal Association addressed by Winston Churchill. During World War I, he turned his yards over to warship construction, and inaugurated a large aircraft department. In 1918, he became comptroller-general of merchant shipbuilding, and was energetic in replacing tonnage lost through submarine warfare. He received his viscountcy in 1921, when King George V opened the new Northern Ireland parliament, but had no heir. He died at sea on 7 June 1924.