Gustavus Vasa Fox was born in Saugus, Massachusetts, on 13 June 1821. He became a U.S. Navy midshipman in January 1838, beginning his seagoing career in USS Cyane. During the next decade and a half, Fox had seen wide-ranging service at sea and with the U.S. Coast Survey, but the slow promotions typical in those days prevented his advancement to the rank of Lieutenant until 1852. For much of the first half of the 1850s he was on leave, serving as an officer on commercial steamships, and in 1856 resigned from the Navy to enter private business. Fox managed a Massachusetts textile mill until mid-1860. In March 1861, after South Carolina had left the Union and tried to isolate Fort Sumter, he offered his services to newly-inaugurated President Abraham Lincoln. Though his efforts to relieve Fort Sumter were not successful, Fox displayed such energy and ability that he was appointed Chief Clerk of the Navy Department in May 1861. At the beginning of August he became the Assistant Secretary of the Navy.

During the four long years of the Civil War, and for a year and a half after the end of the conflict, Fox played an extremely important role in the management of the Navy. Described by one authority as the "de facto chief of naval operations", he maintained close relations with squadron commanders and other senior officers and planned many of the Navy's campaigns against the Confederacy. He was also a forceful advocate of new technologies, notably including the "monitor" type of armored warships.

In mid-1866, in a demonstration of seagoing abilities of low-freeboard armored turret ships, Assistant Secretary Fox crossed the Atlantic in the large monitor Miantonomoh. During this trip he visited Russia and several other northern European nations, making diplomatic calls and collecting information on foreign Naval technological advances. Resigning from the Navy Department soon after the end of his European travels, Fox reentered the business world, ultimately returning to textile manufacturing in Massachusetts. Gustavus V. Fox retired in the later 1870s and died in New York City on 29 October 1883.

The U.S. Navy has named three ships in honor of Gustavus V. Fox, including: USS Fox (Torpedo Boat # 13); USS Fox (DD-234); and USS Fox (DLG-33, later CG-33).