Brooks was born James Lawrence Brooks on May 9, 1940 in Brooklyn, New York, United States, and raised in North Bergen, New Jersey. His parents, Dorothy Helen (née Sheinheit) and Edward M. Brooks, were both salespeople (his mother sold children's clothes; his father furniture). The Brooks family was Jewish; Edward Brooks changed his surname from Bernstein and claimed to be Irish. Brooks' father abandoned his mother when he found out she was pregnant with him, and lost contact with his son when Brooks was twelve. During the pregnancy, Brooks' father sent his wife a postcard stating that "If it's a boy, name him Jim." His mother died when he was 22. He has described his early life as "tough" with a "broken home, [and him being] poor and sort of lonely, that sort of stuff", later adding: "My father was sort of in-and-out and my mother worked long hours, so there was no choice but for me to be alone in the apartment a lot." He has an older sister, Diane, who helped look after him as a child and to whom he dedicated As Good as It Gets.

Brooks was married twice. His first wife was Marianne Catherine Morrissey; they have one daughter, Amy Lorraine Brooks. They divorced in 1964. In 1978, he married Holly Beth Holmberg; they had three children together: daughter Chloe and sons Cooper and Joseph. They divorced in 1999.

Failing to find another job at a news agency, he met Producer Allan Burns at a party. Burns got him a job on My Mother the Car where he was hired to rewrite a script after pitching some story ideas. Brooks then went on to write episodes of That Girl, The Andy Griffith Show and My Three Sons before Sheldon Leonard hired him as a story Editor on My Friend Tony. In 1969 he created for ABC the series Room 222, which lasted until 1974. Room 222 was the second series in American history to feature a black lead character, in this case high school Teacher Pete Dixon played by Lloyd Haynes. The network felt the show was sensitive and so attempted to change the pilot story so that Dixon helped a white student rather than a black one, but Brooks prevented it. On the show Brooks worked with Gene Reynolds who taught him the importance of extensive and diligent research, which he conducted at Los Angeles High School for Room 222, and he used the technique on his subsequent works. Brooks left Room 222 as head Writer after one year to work on other pilots and brought Burns in to produce the show.

Brooks wrote for several shows before being hired as a story Editor on My Friend Tony and later created the series Room 222. Grant Tinker hired Brooks and Burns at MTM Productions to create The Mary Tyler Moore Show in 1970. The show, one of the first to feature an independent working woman as its lead character, was critically acclaimed and won Brooks several Primetime Emmy Awards. Brooks and Burns then created two successful spin-offs from Mary Tyler Moore in the shape of Rhoda (a comedy) and Lou Grant (a drama). Brooks left MTM Productions in 1978 to co-create the sitcom Taxi which, despite winning multiple Emmys, suffered from low ratings and was canceled twice.

With Mary Tyler Moore going strong, Brooks produced and wrote the TV film Thursday's Game, before creating the short-lived series Paul Sand in Friends and Lovers in 1974. He and Burns moved on to Rhoda, a spin-off of Mary Tyler Moore, taking Valerie Harper's character Rhoda Morgenstern into her own show. It was well received, lasting four years and earning Brooks several Emmys. The duo's next project came in 1977 in the shape of Lou Grant, a second Mary Tyler Moore spin-off, which they created along with Tinker. Unlike its source however, the series was a drama starring Edward Asner as Grant. James Brown of the Museum of Broadcast Communications said it "explore[d] a knotty issue facing media people in contemporary society, focusing on how investigating and reporting those issues impact on the layers of personalities populating a complex newspaper publishing company." The show was also critically acclaimed, twice winning the Primetime Emmy Award for Outstanding Drama Series and also a Peabody Award.

Brooks left MTM Productions in 1978 and formed the John Charles Walters Company along with David Davis, Stan Daniels and Ed Weinberger. They decided to produce Taxi, a show about a New York taxi company, which unlike the other MTM Productions focused on the "blue-collar male experience". Brooks and Davis had been inspired by the article "Night-Shifting for the Hip Fleet" by Mark Jacobson, which appeared in the September 22, 1975 issue of New York magazine. The show began on ABC in 1978 airing on Tuesday nights after Three's Company which generated high ratings and after two seasons it was moved to Wednesday. Its ratings fell and in 1982 it was canceled; NBC picked it up, but the ratings remained low and it was dropped after one season. Despite its ratings, it won three consecutive Outstanding Comedy Series Emmys. Brooks' last TV show produced before he began making films was The Associates (1979–1980) for ABC. Despite positive critical attention, the show was quickly canceled.

In 1978, Brooks began work on feature films. His first project was the 1979 film Starting Over which he wrote and co-produced with Alan J. Pakula. He adapted the screenplay from a novel by Dan Wakefield into a film The Washington Post called "a good-humored, heartening update of traditional romantic comedy" unlike the "drab" novel.

Brooks moved into feature film work when he wrote and co-produced the 1979 film Starting Over. His next project was the critically acclaimed film Terms of Endearment, which he produced, directed and wrote, winning an Academy Award for all three roles. Basing his next film, Broadcast News, on his journalistic experiences, the film earned him a further two Academy Award nominations. Although his 1994 work I'll Do Anything was hampered by negative press attention due to the cutting of all of its recorded musical numbers, As Good as It Gets (co-written with Mark Andrus) earned further praise. It was seven years until his next film, 2004's Spanglish. His sixth film, How Do You Know, was released in 2010. Brooks also produced and mentored Cameron Crowe on Say Anything... (1989) and Wes Anderson and Owen Wilson on Bottle Rocket (1996).

Alex Simon of Venice Magazine described Brooks as "[bringing] realism to the previously overstated world of television comedy. Brooks' fingerprints can now be seen in shows such as Seinfeld, Friends, Ally McBeal and numerous other shows from the 1980s and 1990s." Brooks' sitcoms were some of the first with a "focus on character" using an ensemble cast in a non-domestic situation.

Brooks' next project came in 1983, when he wrote, produced and directed Terms of Endearment, adapting the screenplay from Larry McMurtry's novel of the same name. It cost $8.5 million and took four years to film. Brooks won the Academy Awards for Best Picture, Director and Adapted Screenplay.

Brooks started his own film and television production company, Gracie Films, in 1984. He produced Big (1988) and The War of the Roses (1989). Brooks mentored Cameron Crowe and was the executive Producer of Crowe's directorial debut Say Anything... (1989) and produced his later film Jerry Maguire (1996). Brooks also helped Owen Wilson and Wes Anderson after their feature-length script and short film version of Bottle Rocket (1996) were brought to his attention. Brooks went to Wilson and Anderson's apartment in Dallas after agreeing to produce the film. Wilson stated: "I think he felt kind of sorry for us". Despite having "the worst [script] reading [Brooks] had ever heard", Brooks kept faith in the project. Brooks produced and directed Brooklyn Laundry, his first theatrical production, in 1990. It starred Glenn Close, Woody Harrelson and Laura Dern. In 2007, Brooks appeared—along with Nora Ephron, Carrie Fisher and others in Dreams on Spec, a documentary about screenwriting in Hollywood.

In 1987, the Chicago Sun-Times described Brooks' career as "a non-stop crescendo." Although he dropped out of a New York University public relations course, Brooks' sister got him a job as a host at CBS in New York City, a job usually requiring a college education, as she was friends with a secretary there. He held it for two and a half years. For two weeks he filled in as a copywriter for CBS News and was given the job permanently when the original employee never returned. Brooks went on to become a Writer for the news broadcasts, joining the Writers Guild of America and writing reports on events such as the assassination of President Kennedy. He moved to Los Angeles in 1965, to write for documentaries being produced by David L. Wolper, something he "still [hasn't] quite figured out how [he] got the guts to do," as his job at CBS was secure and well-paid. He worked as an associate Producer on series such as Men in Crisis but after sixth months he was laid off as the company were trying to cut back on expenses. Brooks did occasionally work for Wolper's company again, including on a National Geographic insect special.

Although Brooks "never meant" to return to television, he was helping Tracey Ullman start The Tracey Ullman Show and when she could not find another Producer, he stepped in. On the suggestion of friend and colleague Polly Platt, who gave Brooks the nine panel Life in Hell cartoon entitled "The Los Angeles Way of Death" which hangs outside Brooks' Gracie Films office, Brooks asked Life in Hell Cartoonist Matt Groening to pitch an idea for a series of animated shorts to appear on The Tracey Ullman Show. Groening initially intended to present an animated version of his Life in Hell series. However, when Groening realized that animating Life in Hell would require the rescinding of publication rights for his life's work, he chose another approach and formulated his version of a dysfunctional family in the lobby of Brooks' office. After the success of the shorts, the Fox Broadcasting Company in 1989 commissioned a series of half-hour episodes of the show, now called The Simpsons, which Brooks produced alongside Groening and Sam Simon. Brooks negotiated a provision in the contract with the Fox network that prevented Fox from interfering with the show's content. According to Writer Jon Vitti, Brooks contributed more to the episode "Lisa's Substitute" than to any other in the show's history. The Simpsons garnered critical and commercial acclaim, winning numerous awards and is still producing original content after almost 30 years. In a 1998 issue celebrating the 20th century's greatest achievements in arts and entertainment, Time magazine named The Simpsons the century's best television series. In 1997, Brooks was inducted into the Television Hall of Fame.

His 1994 film I'll Do Anything, starring Nick Nolte, was conceived and filmed by Brooks as an old-fashioned movie musical and parody of "Hollywood lifestyles and movie clichés", costing $40 million. It featured songs by Carole King, Prince, and Sinéad O'Connor, among others, with choreography by Twyla Tharp. When preview audience reactions to the music were overwhelmingly negative, all production numbers from the film were cut and Brooks wrote several new scenes, filming them over three days and spending seven weeks editing the film down to two hours. Brooks noted: "Something like this not only tries one's soul – it threatens one's soul." While it was not unusual for Brooks to edit his films substantially after preview screenings on this occasion he was "denied any privacy" because the media reported the negative reviews before its release and "it had to be good enough to counter all this bad publicity." It was a commercial failure, and Brooks attempted to produce a documentary about it four years later but was scuppered by failing to obtain the rights to Prince's song.

In 1995, Brooks and Groening were involved in a public dispute over the episode "A Star Is Burns". Groening felt that the episode was a thirty-minute advertisement for Brooks' show The Critic (which had moved to Fox from ABC for its second season), and was created by former The Simpsons Showrunners Al Jean and Mike Reiss, and whose lead character Jay Sherman appears in the episode. He hoped Brooks would pull the episode because "articles began to appear in several newspapers around the country saying that [Groening] created The Critic", and removed his names from the credits. In response, Brooks said "I am furious with Matt, he's been going to everybody who wears a suit at Fox and complaining about this. When he voiced his concerns about how to draw The Critic into the Simpsons' universe he was right and we agreed to his changes. Certainly he's allowed his opinion, but airing this publicly in the press is going too far. [...] He is a gifted, adorable, cuddly ingrate. But his behavior right now is rotten."

The Critic was short-lived, broadcasting ten episodes on Fox before its cancellation. A total of only 23 episodes were produced, and it returned briefly in 2000 with a series of ten internet broadcast webisodes. The series has since developed a cult following thanks to reruns on Comedy Central and its complete series release on DVD. His early 1990s shows Sibs and Phenom, both produced as part of a multi-show deal with ABC, and the 2001 show What About Joan for the same network, were all similarly short-lived.

Brooks and Burns were hired by CBS programming executive Grant Tinker to create a series together with MTM Productions for Tinker's wife Mary Tyler Moore which became The Mary Tyler Moore Show. Drawing on his own background in journalism, Brooks set the show in a newsroom. Initially the show was unpopular with CBS executives who demanded Tinker fire Brooks and Burns. However the show was one of the beneficiaries of network President Fred Silverman's "rural purge"; executive Bob Wood also liked the show and moved it into a better timeslot. Brooks and Burns hired all of the show's staff themselves and eventually ended it of their own accord. The Mary Tyler Moore Show became a critical and commercial success and was the first show to feature an independent-minded, working woman, not reliant on a man, as its lead. Geoff Hammill of the Museum of Broadcast Communications described it as "one of the most acclaimed television programs ever produced" in US television history. During its seven-year period it received high praise from critics and numerous Primetime Emmy Awards including for three years in a row Outstanding Comedy Series. In 2003, USA Today called it "one of the best shows ever to air on TV". In 1997, TV Guide selected a Mary Tyler Moore Show episode as the best TV episode ever and in 1999, Entertainment Weekly picked Mary's hat toss in the opening credits as television's second greatest moment.

Brooks did not direct and write a film again for seven years until 2004's Spanglish. Filming took six months, ending in June with three days of additional filming in October; Brooks produced three endings for the film, shooting several scenes in "15 to 25 takes" as he did not feel the film was tonally complete, although the script did not change much during filming. He opted to cast Adam Sandler in a more dramatic role than his usual goofball comedy parts based on his performance in Punch-Drunk Love and Sandler's relationship with his family. Describing the length of production, Brooks said: "It's amazing how much more perverse you are as a Writer than as a Director. I remember just being so happy that I'd painted myself into some corners [while writing]. I thought that would make it interesting. When I had to wrestle with that as a Director, it was a different story." Brooks's directing style "drove [the cast] bats", especially Téa Leoni, with Cloris Leachman (who replaced an ill Anne Bancroft a month into filming) describing it as "free-falling. You're not going for some result. It's just, throw it in the air and see where it lands." The film was poorly received and was a box-office failure.

Brooks co-produced and co-wrote the 2007 feature-length film adaptation of The Simpsons, The Simpsons Movie. He directed the voice cast for the first time since the television show's early seasons. Dan Castellaneta found the recording sessions "more intense" than recording the television series, and "more emotionally dramatic". Some scenes, such as Marge's video message to Homer, were recorded over one hundred times, leaving the voice cast exhausted. Brooks conceived the idea for, co-produced and co-wrote the Maggie-centric short film The Longest Daycare, which played in front of Ice Age: Continental Drift in 2012. It was nominated for the Academy Award for Best Animated Short Film in 2013.

His next film, entitled How Do You Know, was released December 17, 2010; Brooks produced, directed and wrote it. The film stars Reese Witherspoon as a professional softball player involved in a love triangle. Brooks began work on the film in 2005, wishing to create a film about a young female athlete. While interviewing numerous women for hundreds of hours in his research for the film he also became interested in "the dilemmas of contemporary Business executives, who are sometimes held accountable by the law for corporate behavior of which they may not even be aware." He created Paul Rudd and Jack Nicholson's characters for this concept. Filming finished in November 2009, although Brooks later reshot the film's opening and ending. The New York Times described it as "perhaps the most closely guarded of Columbia's movies this year." Brooks was paid $10 million for the project, which cost $100 million. The film was negatively received. Patrick Goldstein wrote in the Los Angeles Times that "the characters were stick figures, the jokes were flat, the situations felt scarily insular." He felt the film showed Brooks had "finally lost his comic mojo" concluding "his films used to have a wonderfully restless, neurotic Energy, but How Do You Know feels like it was phoned in from someone resting uncomfortably on his laurels." Variety's Peter Debruge also felt the film showed Brooks had lost his "spark". Richard Corliss of Time was more positive, writing "without being great, it's still the flat-out finest romantic comedy of the year," while "Brooks hasn't lost his gift for dreaming up heroes and heroines who worry amusingly."

The film garnered more praise than I'll Do Anything and Brooks was again nominated for the Academy Awards for Best Picture and Best Original Screenplay. As Good as It Gets received a total of seven Academy Award nominations, winning two, both for Best Actor for Jack Nicholson and Best Actress for Helen Hunt. Jonathan Rosenbaum of the Chicago Reader labelled it Brooks' best film, stating "what Brooks manages to do with [the characters] as they struggle mightily to connect with one another is funny, painful, beautiful, and basically truthful—a triumph for everyone involved." It also ranked 140 in Empire's 2008 list of "The 500 Greatest Movies of All Time". Brooks cast Jack Nicholson in both Terms of Endearment and As Good as It Gets with the actor taking an Academy Award for each role.