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Bill Baarsma was born and raised in Tacoma, Washington. He attended Stadium High School and the University of Puget Sound, where he earned a bachelor's degree in political science. While at Puget Sound, Baarsma was a member of the Sigma Nu Fraternity and was the editor of the student newspaper, the Trail.

After graduating from the University of Puget Sound, Baarsma was granted a Scottish Rite Masonic Fellowship for graduate study at George Washington University, where he earned his master's degree and doctorate. During this time, he held a student assistantship with the U.S. Department of Housing and Urban Development and also worked on the staff of Senator Henry M. Jackson.

Baarsma went on to become a faculty member at the University of Puget Sound, where he taught courses in business management, public administration, political science, and urban studies from 1968 to 2001.

From 1992 to 1999, Baarsma served on the Tacoma City Council, and then, from 2001 to 2009, he served as the 37th mayor of Tacoma. While serving on the City Council and as Mayor, Baarsma played a key role in preservation efforts for several historical assets, including the Murray Morgan Bridge, the Tacoma Chinese Garden and Reconciliation Park, and McMenamins Elks Temple. Baarsma also worked on initiatives to clean up the Foss Waterway, to open the Museum of Glass and Tacoma Art Museum, and to launch the largest municipally-owned telecommunications system in North America.

Baarsma received the University of Puget Sound School of Business and Leadership Award of Distinction in 2010 and the university's Service to Community Award in 2014. In 2022, Baarsma was honored with the Robert Gray Medal from the Washington State Historical Society. At the University of Puget Sound's 131st Commencement Ceremony on Sunday, May 14, 2023, Baarsma delivered the commencement address and also received an honorary degree of Doctor of History, the highest distinction bestowed by the university.