Bae made his acting debut in 1994 in the Korean drama Salut D'Amour (lit. "Love Greeting"). The rookie actor quickly gained popularity, and a year later he won Best New Actor at the 1995 KBS Drama Awards for Our Sunny Days of Youth. Throughout the 1990s, Bae continued playing leading roles on television, in Papa (1996), First Love (1996) which reached a peak viewership rating of 65.8%, The Barefooted Youth (1998), and the Noh Hee-kyung-penned Did We Really Love? (1999). In Hotelier (2001), he played a mergers and acquisitions specialist about to takeover a hotel, but has a change of heart after falling in love with one of its employees (Bae would later reprise his role in a cameo in the 2007 Japanese remake of Hotelier).

Bae Yong-joon was born in Mapo District, Seoul. He entered Sungkyunkwan University in 2000 as a Film Studies major, but later dropped out.

But it was Yoon Seok-ho's Winter Sonata in 2002 that would transform Bae's career, and consequently the face of Korean dramas abroad. A melodrama about first love, lost memory and unknown family ties, Winter Sonata became an unprecedented success in Asia and more than 20 countries, particularly in Japan. Bae gained a tremendous fan base among Japanese middle-aged women, who dubbed him with the honorific nickname Yon-sama (ヨン様; cf. "Emperor Yon") and brought in US$2.3 billion in tourism and Winter Sonata merchandise sales.

In 2003, Bae was cast in his first major big-screen role in Untold Scandal (he had previously appeared in bit parts in two films in the 1990s). In contrast to his gentle, intellectual image, Bae played a conniving, sexually predatory nobleman in E J-yong's adaptation of Les Liaisons dangereuses set in 18th century Joseon. His performance received Best New Actor accolades from the Blue Dragon Film Awards and the Baeksang Arts Awards. He next published a photo book The Image: Volume 1 in 2004, which sold 100,00 copies.

Bae previously dated commercial/music video Director Lee Sa-kang in 2004, and chaebol heiress Koo So-hee from September 2013 to February 2015 (Koo is the daughter of LS Industrial Systems vice chairman Koo Ja-kyun).

Afterwards he worked with Director Hur Jin-ho in April Snow (2005), about a stage lighting Director who discovers his wife's infidelity when she becomes comatose after a near-fatal car accident with her lover. The film had a weak domestic run but due to Bae's star power, it set a new box office record for a Korean film in Japan with ¥2.72 billion.

Bae then entered the restaurant Business, by establishing restaurants and cafes that capitalize on the well-being trend. He owns health food restaurant Gorilla in the Kitchen and high-end traditional Korean restaurant Gosire. As the most famous Korean actor in Japan, he became a proponent for Korean cuisine, and his Gosire lunchboxes (or bento) are sold in Japanese convenience stores and supermarkets. In 2006, Bae became one of Korea's wealthiest celebrities as the majority shareholder (34.6%) of management agency KeyEast (his stocks are valued at US$128 million as of May 2015). Most of the KeyEast executives, including President Bae Sung-woong, are Bae's former managers and have worked with him for more than ten years.

Bae made his much-anticipated return to television in 2007 in The Legend (also known as Taewangsasingi, lit. "The Four Guardian Gods of the King"). The big-budget period-fantasy epic was written by Song Ji-na and directed by Kim Jong-hak, and Bae played dual roles: Gwanggaeto, 19th ruler of the Goguryeo kingdom; and Hwanung, believed to be the son of God and founder of Gojoseon. He was paid ₩250 million (US$217,000) per episode, making him the highest paid Korean television actor of all time.

Bae and KeyEast entered into a joint partnership with Park Jin-young and JYP Entertainment in 2009, which eventually produced Dream High (2011), a teen musical series that revolved around the lives of students attending a high school for the performing arts. As creative Producer, Bae supervised the screenplay and production; he also appeared in a four-episode guest arc. The collaboration between KeyEast and JYPE, named Holyim, lasted until 2013.

He and Actress Park Soo-jin announced their engagement in May 2015 and married on July 27, 2015 at the Sheraton Grande Walkerhill Hotel. The couple only invited friends and relatives to the wedding and forbade attendance of the press media. The couple welcomed their first child, a boy, on October 23, 2016. Their second child, a girl, was born on April 10, 2018.