Knight was born November 18, 1929 in Noblesville, Indiana. Following high school, Knight attended Butler University and Purdue University. He graduated with a Bachelor of Science degree in Aeronautical Engineering from the U.S. Air Force Institute of Technology in 1958.
Knight joined the United States Air Force in 1951. While only a Second Lieutenant, he flew an F-89 at the National Air Show in 1954 and won the Allison Jet Trophy.
Starting in 1958, following his graduation from both U.S. Air Force Institute of Technology and the Air Force Experimental Flight Test Pilot School, Knight served as a test pilot at Edwards Air Force Base, California. He was a project test pilot for the F-100, F-101 Voodoo, F-104 Starfighter and later, T-38 and F-5 test programs. In 1960, he was one of six test pilots selected to fly the X-20 Dyna-Soar, which was slated to become the first winged orbital space vehicle capable of lifting reentries and conventional landings. After the X-20 program was canceled in 1963, he completed the astronaut training curriculum through the Aerospace Research Pilot School at Edwards AFB and was selected to fly the North American X-15.
On October 3, 1967, Knight set a world aircraft speed record for manned aircraft by piloting the X-15A-2 to 4,520 miles per hour (7,274 km/h) (Mach 6.72), a record that still stands today. During 16 flights in the aircraft, Knight also became one of only five pilots to earn their Astronaut Wings by flying an airplane in space, reaching an altitude of 280,500 feet (85,500 m). During his time as a test pilot, he also earned the Distinguished Flying Cross.
After nearly ten years of test flying at Edwards AFB, he went to Southeast Asia in 1968 where he completed a total of 253 combat missions in the F-100 during the Vietnam War. Following his combat tour, he served as test director during development of the F-15 Eagle at Wright Patterson Air Force Base in Dayton, Ohio. He also was the Program Director for the International Fighter (F-5) Program at Wright-Patterson. In 1979, he returned to Edwards AFB, and served as a test pilot for the F-16 Fighting Falcon.
After 32 years of service and more than 6,000 hours in the cockpits of more than 100 different aircraft, he retired from the U.S. Air Force as a Colonel in 1982.
In 1984, he was elected to the city council of Palmdale, California, and four years later became the city's first elected mayor. In 1992, he was elected to serve in the California State Assembly representing the 36th District. He served in the State Senate representing the 17th District from 1996 until his death on May 7, 2004.
William J. “Pete” Knight High School was named in his honor and opened in 2003.