Gilyard was born into a military family in Moses Lake, Washington, in 1955, the son of Clarence Gilyard Sr., a U.S. Air Force officer. His family was originally from New Orleans, Louisiana but Gilyard grew up on Air Force bases in Hawaii, Texas, and Florida. Raised primarily as a Lutheran, he became Catholic in the 1990s.

During his young adulthood, Gilyard lived in the San Bernardino suburb of Rialto, California and attended Eisenhower High School. He was an excellent student, graduating in 1974, and afterward spent a year as an Air Force Academy cadet before leaving the Service to attend Sterling College. In college, he played football and he is a member of the Sigma Chi Fraternity. He also received a tennis scholarship but dropped out of school before completing his studies.

In 1979, Gilyard moved to Los Angeles to become an actor. He became the first African American actor to undertake the role of the Cheerleader in the play Bleacher Bums before he segued into television roles. As a character actor, Gilyard has made guest appearances on TV shows such as Diff'rent Strokes, The Facts of Life, 227, Simon & Simon and Riptide. In 1982–1983, Gilyard was cast in the final season of the NBC TV series CHiPs as Officer Benjamin Webster, opposite Erik Estrada. He co-starred with Jim Carrey in the 1984 NBC sitcom, The Duck Factory.

Gilyard is the second of six children. He has a younger brother who graduated from the Air Force Academy in 1985. Another brother, Milton, suffers from a moderate developmental disability and resides in an assisted-living residence.

Gilyard's movie debut in 1986 was as an F-14 Tomcat Radar Intercept Officer (RIO), LTJG Marcus "Sundown" Williams, in Top Gun. He was also a military man in the 1986 film The Karate Kid Part II. He appeared in the 1988 action film Die Hard as Theo, a computer expert and thief. He also appeared as Reverend Bruce Barnes Left Behind: The Movie and its sequel, Left Behind II: Tribulation Force.

Aside from acting, he appeared in a commercial for McDonald's in 1987.

Gilyard is known for his roles as second private investigator and right-hand man Conrad McMasters to Ben Matlock (played by Andy Griffith) on the legal drama series Matlock from 1989 to 1993; Pastor Bruce Barnes in the Left Behind movie trilogy; Cordell Walker's (played by Chuck Norris) Texas Ranger partner, James "Jimmy" Trivette, in the 1990s crime drama Walker, Texas Ranger; Theo, the terrorist computer expert in Die Hard; and Lieutenant (junior grade) Marcus "Sundown" Williams in Top Gun.

In 1993, he began another long-time co-starring role opposite Chuck Norris on Walker, Texas Ranger. Gilyard portrayed fellow Texas Ranger and best friend of Walker, James "Jimmy" Trivette. The show proved to be a big hit. Gilyard again enjoyed the chance to perform Stunts. The chemistry between Norris & Gilyard made for memorable 1990s television and included Noble Willingham, who played C.D. Parker in the show's six seasons. All three actors were good friends on and off the set.

He has been married twice and has five children. He and his second wife, Elena, have been married since 2001.

In 2003, Gilyard returned to school, receiving an Master of Fine Arts in theatre performance at Southern Methodist University. He is currently an Associate Professor in the College of Fine Arts – Department of Theatre at the University of Nevada, Las Vegas.

August 17, 2005, he gave his last interview, saying he had retired from acting.

In 2012, Gilyard began appearing in films once again, mostly in independent projects. In 2014, Gilyard appeared in the religious film, "A Matter of Faith," which began releasing in theaters in the fall of 2014.

In 2016 Gilyard began performing in the role of Hoak Colburn in The Neil Simon Film Festival's Driving Miss Daisy opposite his former Walker, Texas Ranger co-star Sheree J. Wilson. In the Madden 2018 game he plays the High School coach of the "Longshot" Devin Wade in the "Longshot" section of the game.