Jacob Thompson was born in 1810 in Leasburg, North Carolina. He graduated from the University of North Carolina in 1831 and then worked as a tutor at his alma mater for over a year before being admitted to the state bar in 1835. Thompson established a law practice in Mississippi in 1837 and also made an unsuccessful bid to become state attorney general. Despite his failure, he became a leader in the state Democratic Party; in 1838, he won a seat in the United States House of Representatives.

Thompson served in Congress from 1839 to 1851, when he was lost his election to a seventh term in office. He returned home to Mississippi, refused an offer from President Franklin Pierce to serve as U.S. consul to Havana (1853), and lost an 1855 Senate election to Jefferson Davis. Two years later, President James Buchanan appointed Thompson his secretary of the interior, a post Thompson held from 1857 to 1861.

With Abraham Lincoln's election as President in 1860, Thompson supported secession while continuing to serve the United States government as a member of Buchanan's cabinet. When President Buchanan attempted to fortify Fort Sumter, Thompson resigned his post, informed the people of Charleston, South Carolina, of the President’s plans, and ultimately became an aide to Southern General P.G.T. Beauregard.

Thompson was elected to the Mississippi state legislature in 1863 but was serving as a Confederate agent in Canada one year later when he tried to disrupt the Northern banking system and aid fleeing Confederate prisoners. To support him in his endeavors, Thompson had been given $200,000 and then increased the amount with money Confederates had stolen from Northern trains and banks. When the Civil War ended, Thompson escaped to France with much of the money and used it to live in the Grand Hotel in Paris. When approached about returning the money, Thompson refused, regarding it as remuneration for his property losses.

Jacob Thompson returned to Mississippi in 1868, was never arrested for his wartime activities, and spent the remainder of his life amassing land holdings and becoming a wealthy man. He died in 1885.