Stephen Knight was educated at Bournemouth Grammar School and at Jesus College, Oxford. He graduated from the University of Oxford in 1962, having specialised in Medieval English Literature. He was appointed Teaching Fellow at the University of Sydney in 1963 and lecturer in English in 1964. In 1968-69 he was lecturer in English at the Australian National University. He returned to the University of Sydney in 1970 where he was successively Senior Lecturer and Associate Professor. He contributed extensively to off-campus education, especially in Cultural Studies, through the Workers’ Educational  Association and other bodies, and on campus played a part in the re-shaping of the English curriculum to engage with modern areas of politics and theory. In 1986 he was appointed Robert Wallace Professor of English at the University of Melbourne. In 1992 Knight returned to England to take up the first chair in English at the new De Montfort University at Leicester. In 1994, he took up a position at Cardiff University as Professor and Head of English; he was also Head of the School of English, Philosophy and Communication, and from 2006 was appointed as Distinguished Research Professor.
Many of Knight's scholarly writings have been in the area of medieval English literature, and he has written extensively on the myths of King Arthur and Merlin, and has been recognised as the world’s leading Robin Hood scholar. His long-standing interest in crime fiction generated the ground-breaking study Form and Ideology in Crime Fiction (1980), several other books and essay-collections, including Continent of Mystery: A Thematic History of Australian Crime Fiction (1997) for which he was awarded the Ned Kelly Lifetime Achievement Award. Knight has produced many reviews for newspapers, magazines and radio, including for ten years from the mid 1970s a monthly column in the Sydney Morning Herald on crime fiction; he has also written sociocultural commentaries, notably the much-discussed The Selling of the Australian Mind.
Since returning to Australia in 2011 he has taken up a position as Honorary Research Professor at Melbourne University and continues his commitment to wide public education by working for the new Melbourne Free University