Born at Opotiki on 2 September 1887, he was the eighth and youngest child of Alfred John Sisam, a police officer and farmer, and his wife Maria Knights. He was educated at Auckland Grammar School, and entered University College, Auckland in 1906 with a scholarship, where he graduated M.A. in 1910.
With a Rhodes scholarship, Sisam matriculated at Merton College, Oxford in 1910. He completed a B.Litt. there under Arthur Napier in 1915, producing an edition of the Salisbury Psalter. He married that year. In this period he taught students including J. R. R. Tolkien. Poor health ruled out military service, and he went to work part-time on the Oxford English Dictionary. In 1916 he published on the Beowulf manuscript.
In 1917 the Sisams moved to London, where Kenneth worked as a civil servant. In 1922 he joined Oxford University Press (OUP). With his promotion to assistant secretary, they built a family house at Boars Hill. From 1922 to 1942 Sisam worked at OUP under Robert William Chapman, while developing his scholarly work on Anglo-Saxon, failing in 1925 to become Rawlinson and Bosworth Professor of Anglo-Saxon when Tolkien was chosen.
Sisam was elected to the British Academy in 1941. Appointed OUP secretary in succession to Chapman in 1942, he became a Fellow of Merton College. In 1948 he retired to the Scilly Isles. He died in a nursing home at Lelant in Cornwall on 26 August 1971.