The precocious Davies made his musical debut in a BBC broadcast at age eight. His education continued at Leigh Grammar School and from 1952 at Manchester University, where he received an M.A. in 1957. He also attended the Royal Manchester College of Music from 1952 to 1956, where he and fellow musicians Sir Harrison Birtwistle, John Ogdon, Alexander Goehr, and Elgar Howarth formed New Music Manchester -- a group devoted to the performance of twentieth century works. The Italian government provided Davies with a scholarship in 1957, allowing him to study in Italy for a year with Goffredo Petrassi. From 1959 to 1962, Davies was director of music at the Cirencester Grammar School, where he developed a teaching method based on musical performance. Since then he has written often for children, and continues to devote significant time to education. He spent the next two years in the United States, studying at Princeton University's graduate school with Roger Sessions and Earl Kim on a Harkness Fellowship. He wrote The Shepherd's Calendar (1965) for young singers and instrumentalists for the 1965 UNESCO Conference on Music in Education in Sydney, Australia, and was a visiting composer at Adelaide University in 1966. Back in England in 1967, Davies formed the Pierrot Players with Birtwistle. The Players specialized in performances of contemporary music, and Davies wrote many works for them, including his infamous Eight Songs for a Mad King (1969). He took over sole directorship of the Players in 1970, reforming them as the Fires of London (which he continued to lead and compose for until he disbanded the group in 1987). During the 1960s, Davies became interested in John Taverner, the sixteenth century English composer. In 1962, he wrote the award-winning First Fantasia on an In Nomine of John Taverner, and started work on his first opera, Taverner, which was premiered in 1972.
In 1970, Davies relocated to the Orkney Islands; Orcadian subject matter, in particular, the writings of George Mackey Brown and the Orcadian St. Magnus became a significant part of his music. Brown's writings have inspired works like Black Pentecost (1979) and the massive Orkney Saga project (the first two of its proposed fourteen parts appeared in 1997). In 1977, Davies organized the St. Magnus Festival, which he directed until 1986. The Yellow Cake Revue for singers and piano (1980) features a text by Davies criticizing proposed uranium mining in the Orkneys and is just one of his compositions reflecting his environmental concerns.
Davies received his knighthood in 1987. Two years earlier, he became the Associate Composer-Conductor of the Scottish Chamber Orchestra, an association which led to the Strathclyde Concerto Project, a set of ten concertos for various instruments written over the years 1987 to 1996. His interest in children's music continued with the frequently performed The Turn of the Tide (1992), in which Davies' music is combined with compositions by school children. Among his numerous commissioned works are An Orkney Wedding, with Sunrise (1984), written for the centennial of the Boston Pops; The Doctor of Myddfai (1995), his second full-scale opera, written for the fiftieth anniversary of the Welsh National Opera; and the Symphony No. 8, "Antarctic" (2000), commissioned by the Philharmonia Orchestra.