Eugene Stoner was born in Gasport, Indiana on November 22, 1922 . He went to high school in Long Beach and afterwards worked for the Vega Aircraft Company installing armament. During World War II, he enlisted for Aviation Ordnance in the Marines and served in the South Pacific and northern China .

In late 1945 he began working in the machine shop for Whittaker, an aircraft equipment company, and ultimately became a Design Engineer. In 1954 he came to work as chief engineer for Armalite , a division of Fairchild Engine & Airplane Corporation. While at Armalite, he designed the AR-3, AR-9, AR-11, AR-12, and the AR-16, all of which did not see significant production. Also, he designed the AR-7 survival rifle which was adopted by the United States Air Force . The 7.62 x 51 mm AR-16 became the basis for the 5.56 x 45 mm AR-18 . In 1955, he completed design of the AR-10 which was submitted for trials to the US Army. The Army rejected it in favor of the T44, which would become the M14. Stoner's chief assistant, Robert Fremont and drafter L. James Sullivan were responsible for deriving the AR-15 from the AR-10, by scaling it down to fire the .223 Remington cartridge. Stoner left Armalite in 1961 to serve as a consultant for Colt.

He eventually came to work for Cadillac Gage, where he designed the Stoner 62 Weapons System, a modular weapons system that could be reconfigured to be a standard automatic rifle , a light machine gun , a medium machine gun , or a solenoid-fired fixed machine gun. Because Armalite has sold Stoner's patent for direct gas operation to Colt, the Stoner Weapons System used a piston-operated gas impingement system, though Stoner himself believed direct gas operation was the ideal method for firearms. Once again, Robert Fremont and L. James Sullivan would take a Stoner design and redesign it for the .223 Remington cartridge, to create the Stoner 63 Weapons System.

Stoner also did work for TRW by desinging the TRW 6425 25mm "Bushmaster" auto cannon, which was later manufactured by Oerlikon as the KBA .

He co-founded Ares Incorporated of Port Clinton, Ohio, in 1971 , but left the company in 1989, after designing the Ares Light Machine Gun, sometimes known as the Stoner 86. It was an evolved version of the Stoner 63. At Ares, he also designed the Future Assault Rifle Concept (FARC).

In 1990, he joined Knight's Armament Company (KAC) to create the Stoner Rifle-25 (SR-25), which currently sees military service as the United States Navy Mark 11 Mod 0 Sniper Weapon System. While at KAC, he also worked on yet another version of the Stoner Weapons System, called the Stoner 96. Among his last designs was the SR-50 sniper rifle.

Eugene Stoner was married twice, first to Jean Stoner with whom he had four children. He divorced her in 1962 and married Barbara Hitt in 1965, with whom he remained married until his death. He was also a private pilot who owned his own airplane. Eugene Stoner passed away on April 24, 1997 at his home in Palm City, Florida, from cancer.