Levey was born in Wimbledon, London, and grew up in Leigh-on-Sea, Essex. He attended The Oratory School, a Catholic boarding school near Reading. He was called up for National Service in 1945 and served it largely in Egypt. After demobilisation in 1948 Levey went to Exeter College, Oxford to read English; he graduated with first class honours after only two years' study.
In 1951 Levey joined the National Gallery as assistant to the Keeper, Sir Martin Davies. He combined administrative duties with scholarly work, producing his first catalogue, on the Gallery's 18th-century Italian paintings, in 1956. In the 1960s, affordable art books with colour reproductions for the general reader began to appear, and Levey was commissioned to write an overview of Western painting for Thames & Hudson's World of Art series. The resulting book, A Concise History of Painting: From Giotto to Cézanne (1962), remains a classic overview of European art history from the introduction of perspective in Italy to the beginnings of modern art at the start of the 20th century.
From 1963 to 1964 Levey was Slade Professor of Fine Art at Cambridge University; his lectures were published as From Rococo to Revolution in 1966. The Early Renaissance, written a year later, is considered another milestone in popular art publishing, and was the first non-fiction work to win the Hawthornden Prize for Literature. Levey became deputy Keeper of the National Gallery in 1966, Keeper in 1968, and Director in 1973. He was knighted in 1981.
He relinquished his directorship to care for his wife, the novelist and critic Brigid Brophy, after she was diagnosed with multiple sclerosis in 1985; the disease ultimately claimed her life. Brophy and Levey were married in 1954 and had one daughter Kate Levey (b. 1957).
Levey was a Distinguished Supporter of the British Humanist Association.
His memoir, The Chapel is on Fire, recounts his upbringing and was published in 2000. 
- The German School; National Gallery Catalogues, 1959, National Gallery, London
- Pictures in the Royal Collection, The Later Italian Pictures, 1964, Phaidon Press, London
- A Concise History of Painting: From Giotto to Cézanne, Thames & Hudson 'The World of Art Library' series (ISBN 0-500-20024-6).
- Painting at Court, 1971, Weidenfeld and Nicolson, London.
- Early Renaissance, 1967, Penguin
- The 17th and 18th century Italian Schools; National Gallery Catalogues, 1971, National Gallery, London, ISBN 0901791091
- The Life & Death of Mozart, 1971, Weidenfeld and Nicolson (ISBN 0-297-00477-8).
- From Rococo to Revolution: Major Trends in Eighteenth-Century Painting. Thames & Hudson 'The World of Art Library' series
- The Case of Walter Pater, 1978, Thames & Hudson.
- The National Gallery Collection, 1987, National Gallery Publications, ISBN 0947645349
- Painting and Sculpture in France, 1700-1789, Yale History of Art, 1993
- Florence, a Portrait, 1996, Jonathan Cape.
- Staff writers (31 December 2008). "Obituaries: Sir Michael Levey: former director of the National Gallery". The Times. Retrieved 6 March 2013.
- Staff writers (29 December 2008). "Obituaries: Sir Michael Levey". The Telegraph. Retrieved 6 March 2013.
- Grimes, William (2 January 2009). "Sir Michael Levey, Art Historian and a Director of the British National Gallery, Is Dead at 81". The New York Times. ISSN 0362-4331. Retrieved 10 November 2019.
- Brookner, Anita (May 1967). "From Anita Brookner to Michael Levey-An Open Letter". The Burlington Magazine. 109 (770): 308–310. JSTOR 875309.
- Sorensen, Lee (ed.). "Levey, Michael, Sir". Dictionary of Art Historians. Retrieved 3 May 2019.
- Shone, Richard & Wyld, Martin (May 2009). "Michael Levey (1927—2008)". The Burlington Magazine. 151 (1274): 319–320. JSTOR 40480189.