George William Rusden was one of eleven children of the Reverend George Keylock Rusden and his wife Anne nee Townsend. He migrated with his family to New South Wales, arriving on the 1 May 1834. His father became rector at Maitland. Befriended by Sir Charles Nicholson on the voyage out, Rusden managed his property at Mingay near Gundagai and soon took over others. Pessimistic about the prospects for making money from the land, he went to China in 1847 as a clerk but returned to Sydney to study for the Bar in 1849.
However, on the 4 July 1849 Rusden was appointed agent for the National Schools, first at Port Phillip and later at Moreton Bay. His report, National Education (1853), showed he was influenced by the ideas of Dr. Arnold of Rugby and a strong supporter of state sponsored education. Rusden accepted the position of clerk in the Victorian Colonial Secretary's Office in 1851 and in the next year became clerk of the Executive Council. He remained on the Board of National Education 1853-1862 and in 1856 became clerk of the Parliaments. In 1856-1857 he was on the board of inquiry into the reorganisation of the civil service and a member of the Council of the University of Melbourne to 1886. Rusden was one of the colony's leading Shakespeare enthusiasts, helping to found a Shakespeare scholarship at the university and prizes for children. His last published work was William Shakespeare : his life, his works, and his teaching (1903).
In 1882 Rusden retired to England on a pension. He engaged in a life of writing and travelling in Europe. By 1883 he was well known, both under his own name and the pseudonym 'Yittadairn' as the author of many articles, pamphlets and lectures on political, literary and religious subjects. In 1883 he published the History of Australia and the History of New Zealand, both three-volume works, in London. Both were reviewed in very negative terms but their scale ensured they would be regarded as major achievements of the colonial period. His criticism of the Minister for Native Affairs in New Zealand, John Bryce, led to a libel suit that drained him financially and emotionally. Rusden returned to Melbourne in 1893 on medical advice.
Rusden exhibited a lifelong devotion to the Church of England. He never married.