Kelly was born in the East Liberty neighborhood of Pittsburgh. He was the third son of James Patrick Joseph Kelly, a phonograph salesman, and his wife, Harriet Catherine Curran. His Father was born in Peterborough, Ontario, Canada, to an Irish Canadian family. His maternal grandfather was an immigrant from Derry, Ireland (now Northern Ireland), and his maternal grandmother was of German ancestry. When he was 8, Kelly's mother enrolled him and his brother James in dance classes. As Kelly recalled, they both rebelled: "We didn't like it much and were continually involved in fistfights with the neighborhood boys who called us sissies ... I didn't dance again until I was 15." At one time his childhood dream was to play shortstop for the hometown Pittsburgh Pirates. By the time he decided to dance, he was an accomplished sportsman and able to defend himself. He attended St. Raphael Elementary School in the Morningside neighborhood of Pittsburgh and graduated from Peabody High School at age 16. He entered Pennsylvania State College as a journalism major, but the 1929 crash forced him to work to help his family. He created dance routines with his younger brother Fred to earn prize money in local talent contests. They also performed in local nightclubs.

He also sought to break from the class-conscious conventions of the 1930s and early 40s, when top hat and tails or tuxedos were the norm, by dancing in Casual or everyday work clothes, so as to make his dancing more relevant to the cinema-going public. As his first wife, Actress and Dancer Betsy Blair explained: "A Sailor suit or his white socks and loafers, or the T-shirts on his muscular torso, gave everyone the feeling that he was a regular guy, and perhaps they too could express love and joy by dancing in the street or stomping through puddles...he democratized the dance in movies." In particular, he wanted to create a completely different image from that associated with Fred Astaire, not least because he believed his physique didn't suit such refined elegance: "I used to envy his cool aristocratic style, so intimate and contained. Fred wears top hat and tails to the Manor born—I put them on and look like a truck driver."

In 1931 Kelly enrolled at the University of Pittsburgh to study economics, joining the Phi Kappa Theta fraternity. He became involved in the university's Cap and Gown Club, which staged original musical productions. After graduating in 1933, he continued to be active with the Cap and Gown Club, serving as the Director from 1934 to 1938. Kelly was admitted to the University of Pittsburgh Law School.

His family opened a dance studio in the Squirrel Hill neighborhood of Pittsburgh. In 1932 they renamed it The Gene Kelly Studio of the Dance and opened a second location in Johnstown, Pennsylvania, in 1933. Kelly served as a Teacher at the studio during his undergraduate and law student years at Pitt. In 1931 he was approached by the Beth Shalom Synagogue in Pittsburgh to teach dance, and to stage the annual Kermesse. The venture proved a success, Kelly being retained for seven years until his departure for New York.

Kelly eventually decided to pursue a career as a dance Teacher and full-time entertainer, so he dropped out of law school after two months. He increased his focus on performing and later claimed: "With time I became disenchanted with teaching because the ratio of girls to boys was more than ten to one, and once the girls reached 16 the dropout rate was very high." In 1937, having successfully managed and developed the family's dance school Business, he finally did move to New York City in search of work as a Choreographer. Kelly returned to Pittsburgh, to his family home at 7514 Kensington Street by 1940, and worked as a theatrical actor.

His first Broadway assignment, in November 1938, was as a Dancer in Cole Porter's Leave It to Me!—as the American ambassador's secretary who supports Mary Martin while she sings My Heart Belongs to Daddy. He had been hired by Robert Alton, who had staged a show at the Pittsburgh Playhouse where he was impressed by Kelly's teaching skills. When Alton moved on to choreograph One for the Money he hired Kelly to act, sing, and dance in eight routines. In 1939 he was selected for a musical revue, One for the Money, produced by the Actress Katharine Cornell, who was known for finding and hiring talented young actors.

He was raised as a Roman Catholic, and he was a member of the Good Shepherd Parish and the Catholic Motion Picture Guild in Beverly Hills, California. However, after becoming disenchanted by the Roman Catholic Church's support for Francisco Franco against the Second Spanish Republic during the Spanish Civil War, he officially severed his ties with the church in September 1939. This separation was prompted, in part, by a trip Kelly made to Mexico in which he became convinced of the Church’s failure in helping the poor. After his departure from the Catholic Church, Kelly became an agnostic and had previously described himself as such.

He retained a lifelong passion for Sports and relished competition. He was known as a big fan of the Pittsburgh Steelers and New York Yankees. From the mid-1940s through the early 1950s, he and Blair organized weekly parties at their Beverly Hills home, and they often played an intensely competitive and physical version of charades, known as "The Game".

Kelly married three times. His first marriage was to the Actress Betsy Blair in 1941. They had one child, Kerry (b. 1942), and divorced in April 1957.

Selznick sold half of Kelly's contract to Metro-Goldwyn-Mayer for his first motion picture: For Me and My Gal (1942) starring box-office champion Judy Garland. Kelly claimed to be "appalled at the sight of myself blown up twenty times. I had an awful feeling that I was a tremendous flop." For Me and My Gal performed very well and, in the face of much internal resistance, Arthur Freed of MGM picked up the other half of Kelly's contract. After appearing in a cheap B-movie drama, Pilot No. 5 (1943) and in Christmas Holiday (1944), he took the male lead in Cole Porter's Du Barry Was a Lady (1943) opposite Lucille Ball (in a part originally intended for Ann Sothern). His first opportunity to dance to his own choreography came in his next picture, Thousands Cheer (1943), where he performed a mock-love dance with a mop.

He achieved a significant breakthrough as a Dancer on film when MGM loaned him to Columbia to work with Rita Hayworth in Cover Girl (1944), a film that foreshadowed the best of his Future work. He created a memorable routine dancing to his own reflection. Despite this, noted critic Manny Farber was moved to praise Kelly's "attitude," "clarity," and "feeling" as an actor while inauspiciously concluding, "The two things he does least well—singing and dancing—are what he is given most consistently to do." At the end of 1944, Kelly enlisted in the U.S. Naval Air Service and was commissioned as lieutenant, junior grade. He was stationed in the Photographic Section, Washington D.C., where he was involved in writing and directing a range of documentaries, and this stimulated his interest in the production side of filmmaking.

In Kelly's next film, Anchors Aweigh (1945), MGM gave him a free hand to devise a range of dance routines, including his duets with co-star Frank Sinatra and the celebrated animated dance with Jerry Mouse—the animation for which was supervised by william Hanna and Joseph Barbera. That iconic performance was enough for Farber to completely reverse his previous assessment of Kelly's skills. Reviewing the film, Farber enthused, "Kelly is the most exciting Dancer to appear in Hollywood movies." Anchors Aweigh became one of the most successful films of 1945, and it garnered Kelly his first and only Academy Award nomination for Best Actor. In Ziegfeld Follies (1946)—which was produced in 1944 but not released until 1946—Kelly collaborated with Fred Astaire, for whom he had the greatest admiration, in the famous "The Babbitt and the Bromide" challenge dance routine.

After Kelly returned to Hollywood in 1946, MGM had nothing planned and used him in a routine, black-and-white movie: Living in a Big Way. The film was considered so weak that the studio asked Kelly to design and insert a series of dance routines, and they noticed his ability to carry out such assignments. This led to a lead part in his next picture, with Judy Garland and Director Vincente Minnelli— a musical film version of S.N. Behrman's play, The Pirate, with songs by Cole Porter, in which Kelly plays the lead. The Pirate gave full rein to Kelly's athleticism. It is also notable for Kelly's work with The Nicholas Brothers – the leading black Dancers of their day – in a virtuoso dance routine. Now regarded as a classic, the film was ahead of its time but flopped at the box-office.

Kelly was a lifelong supporter of the Democratic Party. His period of greatest prominence coincided with the McCarthy era in the U.S. In 1947, he was part of the Committee for the First Amendment, the Hollywood delegation that flew to Washington to protest at the first official hearings by the House Committee on Un-American Activities. His first wife, Betsy Blair, was suspected of being a communist sympathizer and when United Artists, who had offered Blair a part in Marty (1955), were considering withdrawing her under pressure from the American Legion, Kelly successfully threatened MGM's influence on United Artists with a pullout from It's Always Fair Weather unless his wife was restored to the part. He used his position on the board of Directors of the Writers Guild of America, West on a number of occasions to mediate disputes between unions and the Hollywood studios.

Kelly asked the studio for a straight acting role and he took the lead role in the early mafia melodrama Black Hand (1950). This exposé of organized crime is set in New York's "Little Italy" during late 19th century and focuses on the Black Hand, a group that extorts money upon threat of death. In real-life incidents upon which this film is based, it was the Mafia, not the Black Hand, who functioned as the villain. Even in 1950, however, Hollywood had to tread gingerly whenever dealing with big-time crime, it being safer to go after a "dead" Criminal organization than a "live" one. There followed Summer Stock (1950)—Garland's last musical film for MGM—in which Kelly performed the celebrated "You, You Wonderful You" solo routine with a newspaper and a squeaky floorboard. In his book "Easy the Hard Way," Joe Pasternak, head of one of the other musical units within MGM, singled out Kelly for his patience and willingness to spend as much time as necessary to enable the ailing Garland to complete her part.

At the peak of his creative powers, Kelly made what in retrospect some see as a mistake. In December 1951, he signed a contract with MGM that sent him to Europe for 19 months to use MGM funds frozen in Europe to make three pictures while personally benefiting from tax exemptions. Only one of these pictures was a musical, Invitation to the Dance, a pet project of Kelly's to bring modern ballet to mainstream film audiences. It was beset with delays and technical problems, and flopped when finally released in 1956.

Kelly received an Academy Honorary Award in 1952 for his career achievements, the same year An American in Paris won six Academy Awards, including Best Picture. He later received lifetime achievement awards in the Kennedy Center Honors (1982), and from the Screen Actors Guild and American Film Institute. In 1999 the American Film Institute also numbered him 15th in their Greatest Male Stars of Classic Hollywood cinema list.

When Kelly returned to Hollywood in 1953, the film musical was already beginning to feel the pressures from television, and MGM cut the budget for his next picture Brigadoon (1954), with Cyd Charisse, forcing him to make the film on studio back lots instead of on location in Scotland. This year also saw him appear as guest star with his brother Fred in the celebrated I Love to Go Swimmin' with Wimmen routine in Deep in My Heart. MGM's refusal to lend him out for Guys and Dolls and Pal Joey put further strains on his relationship with the studio. He negotiated an exit to his contract that involved making three further pictures for MGM. The first of these, It's Always Fair Weather (1956), co-directed with Donen, was a musical satire on television and advertising, and includes his famous roller skate dance routine to I Like Myself, and a dance trio with Michael Kidd and Dan Dailey that Kelly used to experiment with the widescreen possibilities of Cinemascope. MGM had lost faith in Kelly's box-office appeal, and as a result It's Always Fair Weather "premiered" at 17 drive-in theatres around the Los Angeles metroplex. Next followed Kelly's last musical film for MGM, Les Girls (1957), in which he partnered a trio of leading ladies, Mitzi Gaynor, Kay Kendall, and Taina Elg. It too sold few movie tickets. The third picture he completed was a co-production between MGM and himself, a cheapie B-film, The Happy Road, set in his beloved France, his first foray in a new role as producer-director-actor. After leaving MGM, Kelly returned to stage work.

His first foray into television was a documentary for NBC's Omnibus, Dancing is a Man's Game (1958), where he assembled a group of America's greatest sportsmen—including Mickey Mantle, Sugar Ray Robinson, and Bob Cousy—and reinterpreted their moves choreographically, as part of his lifelong quest to remove the effeminate stereotype of the art of dance, while articulating the philosophy behind his dance style. It gained an Emmy nomination for choreography and now stands as the key document explaining Kelly's approach to modern dance.

In 1960 Kelly married his choreographic assistant Jeanne Coyne, who had previously been married to Stanley Donen between 1948 and 1951. Kelly and Coyne had two children, Timothy (b. 1962) and Bridget (b. 1964). This marriage lasted until Coyne's death in 1973.

In 1963 Kelly joined Universal Pictures for a two-year stint. He joined 20th Century Fox in 1965 but had little to do—partly due to his decision to decline assignments away from Los Angeles for family reasons. His perseverance finally paid off, with the major box-office hit A Guide for the Married Man (1967) where he directed Walter Matthau. Then, a major opportunity arose when Fox—buoyed by the returns from The Sound of Music (1965)—commissioned Kelly to direct Hello, Dolly! (1969), again directing Matthau along with Barbra Streisand. The film was nominated for seven Academy Awards, including Best Picture, and won three.

In 1970 he made another TV special: Gene Kelly and 50 Girls and was invited to bring the show to Las Vegas, Nevada—which he did for an eight-week stint on the condition he be paid more than any Artist had ever been paid there. He directed veteran actors James Stewart and Henry Fonda in the comedy western The Cheyenne Social Club (1970), which performed poorly at the box office. In 1973 he worked again with Frank Sinatra as part of Sinatra's Emmy nominated TV special, Magnavox Presents Frank Sinatra. Then, in 1974, he appeared as one of many special narrators in the surprise hit of the year That's Entertainment!. He subsequently directed and co-starred with his friend Fred Astaire in the sequel That's Entertainment, Part II (1976). It was a measure of his powers of persuasion that he managed to coax the 77-year-old Astaire—who had insisted that his contract rule out any dancing, having long since retired—into performing a series of song and dance duets, evoking a powerful nostalgia for the glory days of the American musical film.

In 1977 Kelly starred in the poorly received action film Viva Knievel!, with the popular stuntman, Evel Knievel. Kelly continued to make frequent TV appearances and, in 1980, appeared in an acting and dancing role with Olivia Newton-John in Xanadu (1980)—an expensive theatrical flop that has since attained a cult following. In Kelly's opinion, "The concept was marvelous but it just didn't come off." In the same year, he was invited by Francis Ford Coppola to recruit a production staff for American Zoetrope's One from the Heart (1982). Although Coppola's ambition was for him to establish a production unit to rival the Freed Unit at MGM, the film's failure put an end to this idea. In 1985 Kelly served as executive Producer and co-host of That's Dancing!, a celebration of the history of dance in the American musical. Kelly's final on-screen appearance was to introduce That's Entertainment! III. His final film project was in 1994 for the animated film Cats Don't Dance, released in 1997 and dedicated to him, on which Kelly acted as an uncredited choreographic consultant.

Kelly's third marriage was to Patricia Ward in 1990, and it lasted until Kelly's death in 1996.

Kelly's health declined steadily in the late 1980s. A stroke in July 1994 resulted in a seven-week hospital stay and another stroke in early 1995 left Kelly mostly bedridden in his Beverly Hills home. He died in his sleep at 8:15 a.m. on February 2, 1996, and was cremated, without funeral or memorial services.

Stanley Donen, brought to Hollywood by Kelly to be his assistant Choreographer, received co-director credit for On the Town. According to Kelly: "...when you are involved in doing choreography for film you must have expert assistants. I needed one to watch my performance, and one to work with the cameraman on the timing...without such people as Stanley, Carol Haney and Jeanne Coyne I could never have done these things. When we came to do On the Town, I knew it was time for Stanley to get screen credit because we weren't boss–assistant anymore but co-creators." Together, they opened up the musical form, taking the film musical out of the studio and into real locations, with Donen taking responsibility for the staging and Kelly handling the choreography. Kelly went much further than before in introducing modern ballet into his dance sequences, going so far in the "Day in New York" routine as to substitute four leading ballet specialists for Sinatra, Munshin, Garrett and Miller.

Kelly's athleticism gave his moves a distinctive broad, muscular quality, and this was a very deliberate choice on his part, as he explained: "There's a strong link between Sports and dancing, and my own dancing springs from my early days as an athlete.... I think dancing is a man's game and if he does it well he does it better than a woman." He railed against what he saw as the widespread effeminacy in male dancing which, in his opinion, "tragically" stigmatized the genre, alienating boys from entering the field: "Dancing does attract effeminate young men. I don't object to that as long as they don't dance effeminately. I just say that if a man dances effeminately he dances badly — just as if a woman comes out on stage and starts to sing bass. Unfortunately, people confuse gracefulness with softness. John Wayne is a graceful man and so are some of the great ball players...but, of course, they don't run the risk of being called sissies." In his view, "one of our problems is that so much dancing is taught by women. You can spot many male Dancers who have this tuition by their arm movements—they are soft, limp, and feminine." He acknowledged that, in spite of his efforts—in TV programs such as Dancing: A Man's Game (1958) for example—the situation changed little over the years.