Baer was born Maximilian Adalbert Baer Jr. in Oakland, California, in 1937, the son of boxing champion Max Baer and his wife Mary Ellen Sullivan. His father was of German, Jewish and Scots-Irish descent. His brother and sister are James Manny Baer (1941–2009) and Maude Baer (b. 1943). His uncle was boxer and actor Buddy Baer.

Baer's first acting role was in Goldilocks and the Three Bears at the Blackpool Pavilion in England in 1949. He began acting professionally in 1960 at Warner Bros., where he made appearances on television programs such as Maverick, Surfside 6, Hawaiian Eye, Cheyenne, The Roaring 20s, and 77 Sunset Strip. His career took off two years later, when he joined the cast of The Beverly Hillbillies.

In 1962, Baer was cast in the role of the doltish Jethro Bodine, Jed Clampett's cousin's son. It proved to be the high point of his acting career and the role for which he is best remembered.

He attended Christian Brothers High School in Sacramento, where he earned letters in four Sports and twice won the junior title at the Sacramento Open golf tournament. (Playing with Charlie Sifford, he later won the pro-am tournament at the 1968 Andy Williams - San Diego Open.)

Following the cancellation of The Beverly Hillbillies in 1971, Baer made numerous guest appearances on television, but he quickly found his acting career hampered on the "small screen" by typecasting. He therefore began to concentrate on working in feature motion pictures, especially behind the camera, writing, producing and directing. Baer wrote and produced the drama Macon County Line (1974), in which he played Deputy Reed Morgan. It was the highest-grossing movie per dollar invested at the time. Made for just US$110,000, it earned almost US$25 million at the box office. This record lasted until The Blair Witch Project broke it in 1999. He also wrote, produced, and directed the drama The Wild McCullochs (1975), as well as playing the role of Culver Robinson.

Baer then had the idea of using the title of a popular song as a movie title, so he acquired the rights to Bobbie Gentry's hit song to produce the 1976 film Ode to Billy Joe, which he also directed. Made for only US$1.1 million, it grossed $27 million at the box office, plus earnings in excess of US$2.65 million outside the US, US$4.75 million from television, and US$2.5 million from video. The film starred Robby Benson and Glynnis O'Connor.

He directed the 1979 comedy Hometown U.S.A. before retiring to his home at Lake Tahoe, Nevada. He still makes occasional guest appearances on television.

Baer has said that playing Jethro Bodine sank his acting career. When Paul Henning asked him to reprise the role for a 1981 television movie, he declined. Yet when the feature film The Beverly Hillbillies was made 22 years later, reports cited Baer's dissatisfaction that only Ebsen was asked to do a cameo. He appeared in the 1993 television special The Legend of the Beverly Hillbillies, reprising his role as Jethro. By 2004, Baer had recognized the marketability of The Beverly Hillbillies and appeared with Actress Donna Douglas at the annual TV Land Awards.

Since the success of Ode to Billy Joe, the motion picture industry has produced more than 100 song-title movies. Baer decided to pursue the rights to the hit song "Like a Virgin", recorded by the singer Madonna in 1984. When ABC tried to prevent him from making the film, he sued and won a judgment of more than US$2 million.

In 1985, Baer began investigating the gambling industry. He noted that tourists paid a US$5 to US$6 admission to tour the "Ponderosa Ranch", which was the location for filming some episodes of TV's Bonanza. There was nothing to see but a working cattle ranch, but people enjoyed it because of the Bonanza connection. Baer decided that tourists would also pay for something dealing with The Beverly Hillbillies. He began using his Jethro Bodine role as a marketing opportunity toward the gambling and hotel industry. Baer obtained the sublicensing rights, including food and beverage rights, to The Beverly Hillbillies from CBS in 1991. His Business partner estimates the cost of obtaining the rights and developing the ideas has been US$1 million. Sixty-five Beverly Hillbillies slot machines were built in 1999 and placed in 10 casinos.

He remained close friends with Buddy Ebsen until his death on July 6, 2003, from pneumonia. Just before his acting mentor's death, he and Donna Douglas both had visited Ebsen in the hospital.

In late 2003, Baer attempted the redevelopment of a former Walmart location in Carson City into a Beverly Hillbillies-themed hotel and casino, but was unsuccessful due to building code conflicts and other developers on the neighboring properties. On May 4, 2007, he announced the sale of the property and the purchase of another parcel just outside Carson City, in neighboring Douglas County, where he expected less resistance to his plans. Baer purchased a 2.5-acre (10,000 m) parcel in north Douglas County for US$1.2 million, and will purchase an additional 20 acres (81,000 m) once he has obtained the required zoning variances. The plans are for a 40,000-square-foot (3,700 m) gambling area with 800 slot machines and 16 tables, flanked by various eateries including "Jethro's All You Ken Et Buffet." The project would feature a showroom, cinema complex and a 240-room, five-story hotel.

With the 2015 death of co-star Donna Douglas, Baer is the only surviving cast member.

As of December 2017, development of Jethro's Casino had been suspended. Ongoing litigation involving Max Baer Jr, the developer and Douglas County has delayed the development of the project indefinitely.