Sykes was born 4 May 1923 in Oldham, Lancashire; his mother died three weeks after his birth. He was the second child of his parents' marriage; his older brother (by two years) was named Vernon. Sykes's father was a labourer in a cotton mill and a former army sergeant. When Sykes was two, his father remarried and he gained a half-brother named John. Sykes was educated at Ward Street Central School in Oldham. He joined the Royal Air Force during World War II, qualifying as a wireless operator with the rank of leading aircraftman.

Sykes's entertainment career began during World War II while serving in a Special Liaison Unit, when he met and worked with then FLIGHT Lieutenant Bill Fraser. Sykes also collaborated with fellow RAF servicemen Denis Norden and Ron Rich in the production of troop entertainment shows. Whilst preparing for one of these shows in 1945, Sykes, accompanied by Norden and Rich, went to a nearby prison camp in search of stage lighting; the camp turned out to be the Bergen-Belsen concentration camp, which had recently been liberated by the Allies. Sykes, Norden, and Rich organised a food collection amongst their comrades to feed the starving camp inmates.

When the war ended Sykes decided to try his luck in London, arriving in the middle of the coldest winter in living memory (1946–47). He rented lodgings, expecting to find work quickly, but by the end of the first week he was cold, hungry, and penniless. The turning point in his life and career came on the Friday night of his first week in London: he had a chance meeting in the street with Bill Fraser, who was by now featuring in a comedy at the Playhouse Theatre. Fraser took the impoverished Sykes to the theatre, offered him food and drink, and then asked if Sykes would like to write for him. Sykes began providing scripts for both Fraser and Frankie Howerd and soon found himself in demand as a comedy Writer. Forming a partnership with Sid Colin, he worked on the BBC radio ventriloquism show Educating Archie, which began in 1950, and also Variety Bandbox. Working on Educating Archie led to him meeting Hattie Jacques for the first time.

Sykes had begun to write for television as early as 1948, but from the early 1950s Sykes began to make an ultimately successful transition from radio to TV, writing a number of series episodes and one-off shows for the BBC. His credits in this period include The Howerd Crowd (1952), Frankie Howerd's Korean Party, Nuts in May, and The Frankie Howerd Show, as well as The Big Man (1954) starring Fred Emney and Edwin Styles. Sykes also made his first screen appearance at this time in the army film comedy Orders Are Orders (1954), which also featured Sid James, Tony Hancock, Peter Sellers, Bill Fraser, and Donald Pleasence.

At the turn of the decade Eric Sykes and his old friend and colleague Hattie Jacques co-starred in a new 30-minute BBC TV sitcom, Sykes and a..., which Sykes created in collaboration with Writer Johnny Speight, who had worked with him earlier in the 1950s on the two Tony Hancock series for ITV. The original concept for the new series had Eric living in suburbia with his wife, with simple plots centring on everyday problems, but Sykes soon realised that by changing the house-mate from wife to sister it offered more scope for storylines and allowed either or both to become romantically entangled with other people.

He married Edith Eleanore Milbrandt on 14 February 1952 and they had three daughters, Catherine, Julie, Susan, and a son, David. In the year Sykes died they marked their 60th wedding anniversary.

In 1955 Sykes wrote and performed in a BBC Christmas spectacular, a spoof pantomime called Pantomania, which featured many well-known BBC personalities of the era; it was directed by Ernest Maxin, who went on to produce some of the most famous comedy routines for Morecambe & Wise. That same year Sykes signed a contract as scriptwriter and variety show presenter for the newly formed independent television company ATV, while continuing to write and perform for the BBC.

His next venture for the BBC was a one-hour special, Sykes Directs a Dress Rehearsal, playing a harassed Director in a fictional TV studio rehearsal room, just before going live to air. Later that year he wrote and appeared in another all-star spectacular called Opening Night which celebrated the opening of the 1956 National Radio Show at Earl's Court. In 1957 he created Closing Night, which closed the 1957 show.

By this time Sykes had developed hearing problems; he subsequently lost most of his hearing, but learned to lip-read and watch other performers say their lines to get his cues. In 1957 he wrote and appeared in an edition of Val Parnell's Saturday Spectacular, the first of two shows in this series that he wrote for Peter Sellers. The first went out under the title of Eric Sykes Presents Peter Sellers, and the second, in 1958, was called The Peter Sellers Show.

In 1959 Sykes wrote and directed the one-off BBC special Gala Opening, with a cast that included 'Professor' Stanley Unwin and Hattie Jacques, and played a small supporting role in the Tommy Steele film Tommy the Toreador.

The first series (five episodes, all written by Johnny Speight) premiered on 29 January 1960 and were an immediate hit, establishing 'Eric and Hat' as one of Britain's most popular and enduring comedy partnerships. The second series of six episodes (written from storylines suggested by Speight) were mostly written by Sykes, although he co-wrote one episode each with John Antrobus and Spike Milligan. All subsequent episodes were written solely by Sykes.

In December 1961 Sykes co-starred with Warren Mitchell in Clicquot et Fils, a one-off, 30-minute comedy written by Associated London Scripts colleagues Ray Galton and Alan Simpson. This was the premiere episode of a new BBC series Comedy Playhouse, which became an important proving ground for many successful TV comedy series.

In 1962 Sykes played his first starring film role, being a travelling salesman in the comedy Village of Daughters, set in an Italian village, but featuring a mostly British cast including John Le Mesurier (who was at that time married to Hattie Jacques), and Roger Delgado. This was followed by a supporting role in the MGM British comedy, Kill or Cure, starring Terry-Thomas with a cast of British comedy stalwarts including one of the first film appearances by Ronnie Barker. Both films were made by the same writer-director team behind the popular Margaret Rutherford Miss Marple film, Murder She Said.

Nine short seasons of Sykes and A... were made between 1960 and 1965, ranging between six and nine episodes each, plus a short 1962 special in the BBC's annual Christmas Night with the Stars programme, now lost. Twenty-five of the original fifty-nine episodes have survived in the BBC archives. It was during this series that Sykes introduced one of his best known creations, the wordless slapstick routine The Plank, which originally appeared in Episode 2, Series 7 of Sykes And A..., first broadcast on 3 March 1964 under that title.

During 1965, Sykes made what proved to be the final series of Sykes and A... and appearing in three major films. He had a small role in Those Magnificent Men in their Flying Machines, joining an all-star cast of British and American TV and film luminaries. The spy spoof The Liquidator was directed by Jack Cardiff and starred Rod Taylor with Sykes in a secondary role. His third film of that year was the Boulting brothers' Rotten to the Core starring Anton Rodgers (who replaced Peter Sellers) with Sykes. Sykes had a minor film role in another spy comedy The Spy with a Cold Nose (1966), written by Galton and Simpson.

Returning to television, Sykes and Jacques appeared in the 1967 special Sykes Versus ITV with Tommy Cooper and Ronnie Brody. In 1968 he had a supporting role in an Anglo-American film co-production, the Edward Dmytryk western Shalako, starring Sean Connery and Brigitte Bardot.

Sykes also made another minor film appearance in 1969 in the comedy Monte Carlo or Bust!, which was also titled as Those Daring Young Men in Their Jaunty Jalopies.

Sykes was a follower of Oldham Athletic and was an honorary Director of the club in the 1970s.

Sixty-eight colour episodes of Sykes were made between 1972 and 1979; forty-three of the shows were re-workings of scripts from the 1960s series, which had been recorded in monochrome. These included a remake of the 1960s episode Sykes and a Stranger, guest-starring Peter Sellers as the stranger, Tommy Grando, in what was to be Sellers’s final TV part.

In 1973 Sykes had a small role as a police sergeant in the Douglas Hickox thriller Theatre of Blood.

In 1977, Sykes wrote and starred in another television special, Eric Sykes Shows a Few of Our Favourite Things. He also wrote the script for the 1977 Yorkshire Television adaptation of Charley's Aunt and appeared in the role of Brassett.

Sykes was the subject of Thames Television's This Is Your Life, broadcast on 25 December 1979.

Sykes wrote and appeared in two Thames Television specials broadcast during 1980 – The Likes of Sykes and Rhubarb Rhubarb. The latter special, a remake of his 1969 short film Rhubarb which Sykes also directed, featured many of his old friends including Jimmy Edwards, Bob Todd, Charlie Drake, Bill Fraser, Roy Kinnear, Beryl Reid, and Norman Rossington. It was his last screen appearance with Hattie Jacques. The film employed an idea drawn from the British showbiz tradition in which extras used the word "rhubarb" to simulate low-level background dialogue, which had also been a running joke in The Goon Show. In 1981 Sykes wrote, directed, and starred in the offbeat comedy If You Go Down in the Woods Today for Thames, with a cast including Roy Kinnear, Fulton Mackay, and George Sewell.

During 1982 Sykes played the Chief Constable in the slapstick police comedy film The Boys in Blue, which starred the comedy duo Cannon and Ball, with Jon Pertwee. For Thames TV that year he also appeared in and wrote The Eric Sykes 1990 Show with Tommy Cooper and Dandy Nichols and It's Your Move, a wordless slapstick comedy depicting the travails of a couple (Richard Briers and Sylvia Syms) moving into a new home, who hire an accident-prone firm of house removers, headed by Sykes. It featured an all-star cast including Tommy Cooper, Bernard Cribbins, Jimmy Edwards, Irene Handl, Bob Todd, and Andrew Sachs. Sykes produced one further silent movie for Thames in 1988, Mr. H. Is Late, set at a funeral. In 1984 Sykes played the Genie in the children's film Gabrielle and the Doodleman, which also featured Windsor Davies (who would also appear with Sykes in the BBC's Gormenghast in 2000), Bob Todd, Lynsey de Paul, and Gareth Hunt.

In 1985 he played the Mad Hatter in the Anglia Television serial adaptation of Alice in Wonderland, joining an all-star cast that included Michael Bentine, Leslie Crowther, and Leonard Rossiter, and he also had an uncredited role (as an arcade attendant) in the Julien Temple film musical Absolute Beginners (1986) which stars Patsy Kensit. In 1986 Sykes played Horace Harker in "The Six Napoleons", an episode of the Granada TV adaptation of the Sherlock Holmes stories starring Jeremy Brett.

Sykes toured Australia with the play Run for Your Wife (1987–88) with a cast that included Jack Smethurst, David McCallum, and Katy Manning. In 1989, in his first series since the Sykes series ended in 1979, Sykes starred as the secretary in the ITV situation comedy The Nineteenth Hole, written by Johnny Speight. The series was not a success and ran for only one series, being dropped by ITV for being unfunny, racist, and sexist.

In 1994 Sykes appeared in both episodes of Paul Merton's Palladium Story, a documentary series celebrating the history of the London Palladium. From March 1997, Sykes, together with Tim Whitnall, Toyah Willcox, and Mark Heenehan, provided narration for the BBC pre-school TV series Teletubbies. It is his voice that announces "Teletubbies!" during the title sequence and on the show's theme song, which became a number one single in December 1997. In 1998 Sykes appeared in one episode of Dinnerladies as the father of Stan (Duncan Preston).

In 2000 Sykes appeared as Mollocks, the servant of Dr Prunesquallor, in the BBC's mini-series adaptation of Mervyn Peake's Gormenghast, which was the last production to feature both Milligan and Sykes (although they did not appear together on screen). In 2001 he had one of his few serious screen roles, playing a servant in the blockbuster supernatural thriller film The Others, starring Nicole Kidman. In 2005 he played Frank Bryce in Harry Potter and The Goblet of Fire.

In the 2005 New Year Honours List, Sykes was promoted within the Order of the British Empire from Officer (OBE) to Commander (CBE) level. He had been appointed an OBE in 1986 for services to drama, following a petition by MPs. Sykes was an honorary President of the Goon Show Preservation Society.

In 2007 he appeared in Last of the Summer Wine and in New Tricks, as well as taking a small role in an episode of the sitcom My Family. In October 2010 Sykes appeared in Hallowe'en Party, an episode in the twelfth series of Agatha Christie's Poirot.

Sykes died on the morning of 4 July 2012, aged 89, at his home in Esher, Surrey, England, after a short illness. His family was with him when he died.