Wood's father, Edward Sr., worked for the U.S. Postal Service as a custodian, and his family relocated numerous times around the United States. Eventually, they settled in Poughkeepsie, New York, where Ed Wood Jr. was born in 1924. According to Wood's second wife, Kathy O'Hara, Wood's mother Lillian would dress him in girl's clothing when he was a child because she had always wanted a daughter. For the rest of his life, Wood crossdressed, infatuated with the feel of angora on his skin.

On his 12th birthday, in 1936, Wood received as a gift his first movie camera, a Kodak "Cine Special". One of his first pieces of footage, and one that imbued him with pride, showed the airship Hindenburg passing over the Hudson River at Poughkeepsie, shortly before its historic crash at Lakehurst, New Jersey. One of Wood's first paid jobs was as a cinema usher, and he also sang and played drums in a band. He later fronted a singing quartet called "Eddie Wood's Little Splinters", having learned to play a variety of string instruments.

In 1942, Wood enlisted in the United States Marine Corps, just months after the attack on Pearl Harbor. Assigned to the 2nd Defense Battalions, he reached the rank of corporal before he was discharged. He was involved in the Battle of Tarawa, among others, and during the war, he lost his two front teeth to a Japanese soldier's rifle butt and was shot several times in the leg by a machine gunner. [Proved false per The Unknown War of Edward D. Wood, Jr.: 1942 - 1946 by James Pontolillo.] Wood later claimed that he feared being wounded in battle more than he feared being killed.

In 1947, Wood moved to Hollywood, California, where he wrote scripts and directed television pilots, commercials and several forgotten micro-budget westerns with names such as Crossroads of Laredo and Crossroad Avenger: The Legend of the Tucson Kid. In 1948, Wood wrote, produced, directed, and starred in Casual Company, a play derived from his unpublished novel, which was based on his Service in the United States Marine Corps. It opened at the Village Playhouse to negative reviews on October 25.

In the 1950s, Wood made a number of low-budget films in the science fiction, comedy, and horror genres, intercutting stock footage. In the 1960s and 1970s, he made sexploitation movies and wrote over 80 pulp crime, horror and sex novels. In 1975, he was awarded a Golden Turkey Award as Worst Director of All Time, renewing public interest in his work. Wood's career and camp approach has earned him and his films a cult following.

Wood had a long-term relationship with Actress and Songwriter Dolores Fuller, whom he met in late 1952. The two lived together for a time and Wood cast Fuller in three of his films: Glen or Glenda, Jail Bait and Bride of the Monster. Fuller later said she initially had no idea that Wood was a crossdresser and was mortified when she saw Wood dressed as a woman in Glen or Glenda. The couple broke up in 1955 after Wood cast another Actress in the lead role of Bride of the Monster (Wood originally wrote the part for Fuller and reduced her part to a 1-minute cameo) and because of Wood's excessive drinking.

In 1953, Wood wrote and directed the exploitative semi-documentary Glen or Glenda (originally titled I Changed My Sex!) with Producer George Weiss, which starred Wood (under the alias "Daniel Davis"), his girlfriend Dolores Fuller and Lugosi as a god-like narrator. The film was loosely based on trans woman Christine Jorgensen. The film was panned by critics then and now (being considered as one of Wood's worst films), though many praise the camp qualities. It is notable for its groundbreaking empathetic portrayal of LGBT issues at a time when most media were very hostile.

In 1954, Wood directed and produced a crime film, Jail Bait (originally titled The Hidden Face), along with co-writer Alex Gordon, which starred Lyle Talbot and Steve Reeves (in one of his first acting jobs). Bela Lugosi was supposed to play the lead role of the plastic surgeon, but was busy when filming started and had to bow out.

While making Bride of the Monster in late 1955, Wood married Norma McCarty. McCarty appeared as Edie, the airplane stewardess in Plan 9 from Outer Space. The marriage was annulled in 1956.

The scenes of teenagers at a pizza place were shot in 1956 for the unfinished Juvenile delinquency film Rock and Roll Hell (a.k.a. Hellborn). This includes a fight scene performed by Ed Wood himself (uncredited) and Conrad Brooks.

In 1958, Wood wrote, produced and directed Night of the Ghouls (originally titled Revenge of the Dead), starring Kenne Duncan, Tor Johnson (as "Lobo" from Bride of the Monster), Criswell, Duke Moore and Valda Hansen. The film may have been released marginally in March 1959, and then promptly vanished from sight for nearly three decades, when it was resurrected on home video. For many years, it was thought to be a lost film. (Wood also co-wrote the screenplay for The Bride and the Beast (1958), directed by Adrian Weiss.)

Beginning in the early 1960s, Wood wrote at least eighty lurid crime and sex novels in addition to hundreds of short stories and non-fiction pieces for magazines. Thirty-two stories known to be by Wood (he sometimes wrote under pseudonyms such as "Ann Gora") are collected in Blood Splatters Quickly, published by OR Books in 2014. Novels include Black Lace Drag (1963) (reissued in 1965 as Killer in Drag), Orgy of the Dead (1965), Devil Girls (1967), Death of a Transvestite (1967), The Sexecutives (1968), The Photographer (1969), Take It Out in Trade (1970), The Only House in Town (1970), Necromania (1971), The Undergraduate (1972), A Study of Fetishes and Fantasies (1973) and Fugitive Girls (1974).

In 1963, Wood wrote the screenplay for Shotgun Wedding, an exploitation film about hillbillies marrying child brides, and Wood's transitional film, once again combining two genres, horror and grindhouse skin-flick, was 1965's Orgy of the Dead, originally titled Nudie Ghoulies. Wood handled various production details while Stephen C. Apostolof directed under the pseudonym A. C. Stephen. The film begins with a re-creation of the opening scene from the then-unreleased Night of the Ghouls. Criswell, wearing one of Lugosi's old capes, rises from his coffin to deliver an introduction taken almost word-for-word from the previous film. Set in a misty graveyard, the Lord of the Dead (Criswell) and his sexy consort, the Black Ghoul (a Vampira look-alike), preside over a series of macabre performances by topless Dancers from beyond the grave (recruited by Wood from local strip clubs). The film also features a Wolf Man and a Mummy. Together, Wood and Apostolof went on to make a string of sexploitation films up to 1977. Wood co-wrote the screenplays and occasionally acted. Venus Flytrap (1970), a US/Japan horror film, was based on an unproduced Wood screenplay from the 1950s.

In 1965, Wood wrote the quasi-memoir Hollywood Rat Race, which was eventually published in 1998. In it, Wood advises new Writers to "just keep on writing. Even if your story gets worse, you'll get better", and also recounts tales of dubious authenticity, such as how he and Bela Lugosi entered the world of nightclub cabaret.

In 1969, Wood appeared in The Photographer (a.k.a. Love Feast or Pretty Models All in a Row), the first of two films produced by a Marine buddy, Joseph F. Robertson, portraying a Photographer using his position to engage in sexual antics with Models. He had a smaller role in Robertson's second film, Mrs. Stone's Thing, as a transvestite who spends his time at a party trying on lingerie in a bedroom.

Throughout the 1970s, Wood worked with friend Stephen C. Apostolof, usually co-writing scripts, but also serving as an assistant Director and associate Producer. (Together they had made Wood's Orgy of the Dead in 1965.) His last known on-screen appearance was in Apostolof's Fugitive Girls (a.k.a. Five Loose Women) in 1974, where he played both a gas station attendant called "Pops" and a sheriff on the women's trail.

Wood's 1971 film Necromania was also believed lost for years, until an edited version resurfaced, at a yard sale in 1992, followed by a complete unedited print in 2001. A complete print of the previously lost Wood pornographic film, The Young Marrieds, was discovered in 2004. It was released as a part of the four DVD set, The Lost Sex Films of Ed Wood Jr., by Alpha Blue Archives in July 2014.

Wood's 1972 film The Undergraduate is considered to be a lost film, as was his 1970 film Take It Out in Trade. An 80-minute print of Take It Out In Trade was later discovered and publicly exhibited at Anthology Film Archives in New York City in September 2014. Silent outtakes from the film were released by Something Weird Video.

By 1978, Wood's depression had worsened, and he and his wife Kathy had become alcoholics. They were evicted from their Hollywood apartment on Yucca Street on Thursday, December 7, 1978 in total poverty. The couple moved into the North Hollywood apartment of their friend, actor Peter Coe. Wood spent the weekend drinking vodka. Around noon on Sunday, December 10, Wood felt ill and went to lie down in Coe's bedroom. From the bedroom, he asked Kathy to bring him a drink, which she refused to do. A few minutes later he yelled out, "Kathy, I can't breathe!", a plea Kathy ignored as she later said she was tired of Wood's bossing her around. After hearing no movement from the bedroom for 20 minutes, Kathy sent a friend to check on Wood, who discovered him dead from a heart attack. Kathy later said, "I still remember when I went into that room that afternoon and he was dead, his eyes and mouth were wide open. I'll never forget the look in his eyes. He clutched at the sheets. It looked like he'd seen hell."

It became his best-known film, and received a cult following in 1980, where Michael Medved declared this film "the worst film ever made" in his book The Golden Turkey Awards.

In 1986, in an essay paying homage to Wood in Incredibly Strange Films, Jim Morton wrote: "Eccentric and individualistic, Edward D. Wood Jr. was a man born to film. Lesser men, if forced to make movies under the conditions Wood faced, would have thrown up their hands in defeat."

In Wood's 1992 biography Nightmare of Ecstasy: The Life and Art of Edward D. Wood Jr., Wood's wife Kathy recalls that Wood told her that his mother dressed him in girls' clothing as a child. Kathy stated that Wood's transvestism was not a sexual inclination, but rather a neomaternal comfort derived mainly from angora fabric (angora is featured in many of Wood's films, and "Ann Gora" also happened to be one of Wood's pen names). Even in his later years, Wood was not shy about going out in public dressed in drag as Shirley, his female alter ego (who also appeared in many of his screenplays and stories).

From 1993 to 1994, three of Wood's films (Bride of the Monster, The Violent Years, and The Sinister Urge) were featured on the television series Mystery Science Theater 3000, which gave those works wider exposure. Producers of MST3K considered including Plan 9, but found it had too much dialogue for the show's format.

In 1994, Director Tim Burton released the biopic Ed Wood, starring Johnny Depp in the title role and Martin Landau, who won an Academy Award for Best Supporting Actor for his portrayal of Bela Lugosi. It also won an Academy Award for Best Makeup for Rick Baker. Conrad Brooks appeared in the movie, in a cameo role of Barman. The film received mass critical acclaim, but did poorly at the box office. It has since developed a cult following.

In 1996, Reverend Steve Galindo of Seminole, Oklahoma, created a legally recognized religion with Wood as its official savior. Founded as a joke, the Church of Ed Wood now boasts over 3,500 baptized followers. Woodites, as Steve's followers are called, celebrate Woodmas on October 10, which is Ed's birthday. Numerous parties and concerts are held worldwide to celebrate Woodmas. On October 4–5, 2003, horror host Mr. Lobo was canonized as the "Patron Saint of late night movie hosts and insomniacs" in the Church of Ed Wood.

In 1997, the University of Southern California began holding an annual Ed Wood Film Festival, in which student teams are challenged to write, film and edit an Ed Wood-inspired short film based on a preassigned theme. Past themes have included Rebel Without a Bra (2004), What's That in Your Pocket? (2005), and Slippery When Wet (2006).

In 1998, Wood's previously unfilmed script I Woke Up Early the Day I Died was finally produced, starring Billy Zane and Christina Ricci, with appearances by Tippi Hedren, Bud Cort, Sandra Bernhard, Karen Black, John Ritter and many others. Outside of a brief New York theatrical engagement, the film did not receive a commercial release in the United States, and was only available on video in Germany due to contractual difficulties.

In 2001, horror film Director and heavy metal musician Rob Zombie released The Sinister Urge, which is titled after Wood's film.

In 2002, American horror-punk supergroup Murderdolls released the album Beyond the Valley of the Murderdolls, which features the single "Dead in Hollywood" and makes a reference to Wood with the lyrics, "You can knock on Ed Wood, but it won't do you no good/Cause all of my heroes are dead in Hollywood."

In 2005, the Plan 9 cast were lampooned in an episode of the television series Deadly Cinema; the following year, clips of this episode were featured in the documentary Vampira: The Movie.

In 2006, MST3K head Writer and host Michael J. Nelson recorded an audio commentary track for a DVD release of a colorized version of Plan 9 from Outer Space. In 2009, Nelson and fellow MST3K alums Kevin Murphy and Bill Corbett mocked Plan 9 again in their very first RiffTrax Live event, coinciding with the film's 50th anniversary.

In 2012, Director John Johnson announced plans to film a remake of Plan 9 From Outer Space, released straight-to-DVD in 2015.

In 2017 "Dreamer- the Ed Wood musical" was produced by award-winning Composer Rick Tell.