Mills was born in Tavistock Place, Sunderland, the son of a shipbuilder. On leaving school at 14, he served a seven year apprenticeship with George Clark, the famous marine engineers of Sunderland, and then spent some years at sea. He began business on his own account as a general engineer in Sunderland in 1885 and established the first aluminium foundry in the United Kingdom. There, and in Birmingham, he turned out castings for the motor-car and aircraft industries. His name is associated with the aluminium golf-club.
Early in 1915, he opened Mills Munitions in Birmingham to make the hand grenade known as the Mills bomb, which was used in vast quantities by the British and their allies during World war I. He was knighted for his services in 1922, and also received some £27,000 from the government, but had to pay income tax on it, causing him to say that he had lost money on the famous grenade.