Najam Sethi graduated from Government College University in Lahore. He received a Master's degree in economics at Cambridge University in the UK, and spent two additional years there at Clare College as a PhD research student.
Najam Sethi conceived the idea for an independent newspaper when he was briefly imprisoned in 1984 on trumped-up copyright charges, no newspapers had protested his arrest. The following year, Sethi and his wife Mohsin applied for a publishing license under Mohsin's name intended to publish "a social chit chats, with lots of pictures of parties and weddings. It was finally approved in 1987, but Mohsin requested a one-year delay to avoid the first issue coming out during the dictatorship of General Zia ul Haq. The paper's first issue appeared in May 1989.
In early 1999, Najam Sethi gave an interview to a team for the BBC TV show Correspondent, which was planning to report on corruption in the Pakistani government. At the beginning of May 1999, he was warned by contacts that his cooperation with the team was being interpreted by the government as an attempt to destabilize it, and that officials were planning Sethi's arrest. On 8 May 1999, he was taken from his home by government agents. According to Sethi's wife Mohsin, at least eight armed officers broke into the house, assaulting the family's security guards; when asked to produce a warrant, one of them threatened simply to shoot Sethi on the spot. Mohsin was tied up and left locked in another room.
Sethi was then held for almost a month without charge, in Govenment custody. He was kept incommunicado at a detention center in Lahore. Amnesty International stated it's belief that his arrest was connected with his investigations into government corruption, and designated him a prisoner of conscience. The US-based Committee to Protect Journalists also sent a protest letter to Prime Minister Nawaz Sharif, noting the organization's dismay that the state continues its persecution of independent journalists, and World Bank president James Wolfensohn called Prime Minister Nawaz Sharif to urge Sethi's release.
On 1 June 1999, authorities charged Sethi with "Condemnation of the Creation of the State and Advocacy of Abolition of its Sovereignty" and "Promoting Enmity Between Different Groups" and transferred him to police custody. However, the following day, the Supreme Court of Pakistan ruled that the government had provided insufficient evidence to justify Sethi's detention. He was released, and the charges against him were dropped.
In June 1991, Mohsin and Sethi's publishing company, Vanguard Books, released Tehmina Durrani's My Feudal Lord, a "politically explosive" book about her marriage with leading politician Mustafa Khar. In the book, Durrani alleges that Khar mistreated and abused her. It was an instant sensation and later became the hottest book in Pakistan's history. Durrani signed a contract vesting foreign rights with Mohsin and giving her 50% of foreign royalties.
On 19 May 1999, however—during Sethi's one-month incommunicado detention—Durrani called a press conference to denounce him as having stolen all of her earnings from the book, stating that his actions were an even bigger case of hypocrisy than my experience with the feudal system. Durrani sued Sethi for mental torture, and he countersued for defamation. An earlier dispute over the foreign rights had been settled out of court in 1992.
In 2008, when Sethi's newspapers ran a series of editorials opposing religious fundamentalism, the Taliban threatened him with death, causing him to live under constant guard. Sethi also received death threats in July 2008 for publishing an editorial cartoon showing Umme Hassaan, principal of a girls' school, encouraging young women in burqas to kidnap Chinese masseuses.
In 1999, Sethi and Mohsin were both given the International Press Freedom Award of the US-based Committee to Protect Journalists, which recognizes journalists who show courage in defending press freedom despite facing attacks, threats, or imprisonment. Ten years later, he was awarded the 2009 Golden Pen of Freedom, the annual press freedom prize of the World Association of Newspapers.
Najam Sethi has been appointed as the caretaker Chief Minister of Punjab province for the General Elections 2013, which are scheduled to be held on May 11, 2013. He was elected on March 26, 2013. His name was presented by Pakistan People's Party and opposition Pakistan Muslim League - Nawaz agreed on his name. He is now Chief Minister of Pakistan's biggest province Punjab.
Sethi is married to fellow journalist Jugnu Mohsin, the publisher of The Friday Times. The couple have two children: novelist Ali Sethi and journalist Mira Sethi.