Levant was born in Pittsburgh, Pennsylvania, United States, in 1906, to Orthodox Jewish parents from Russia. His Father, Max, was a watchmaker who wanted his four sons to become either dentists or doctors. His mother Annie was a highly religious woman whose Father was a Rabbi who presided over his daughter’s wedding to Max Levant.

Levant was open about his neuroses and hypochondria. The 1920s and 1930s wit Alexander Woollcott, a member of the Algonquin Round Table, once said of him: "There isn't anything the matter with Levant that a few miracles wouldn't cure." Despite his afflictions, Levant was considered a multifaceted genius by some. He himself wisecracked "There's a fine line between genius and insanity. I have erased this line." In later life Levant became addicted to prescription drugs, was frequently committed to mental hospitals by his wife, and increasingly withdrew from the limelight.

Oscar Levant moved to New York in 1922, following the death of his Father. He began studying under Zygmunt Stojowski, a well-established piano pedagogue. In 1924, aged 18, he appeared with Ben Bernie in a short film, Ben Bernie and All the Lads, made in New York City in the DeForest Phonofilm sound-on-film system.

In 1928, Levant traveled to Hollywood, where his career took a turn for the better. During his stay, he met and befriended George Gershwin. From 1929 to 1948 he composed the music for more than twenty movies. During this period, he also wrote or co-wrote numerous popular songs that made the Hit Parade, the most noteworthy being "Blame It on My Youth" (1934), now considered a standard.

From the 1930s through the mid-1950s, Levant appeared in a number of feature films, often playing a Pianist or Composer. He had major supporting roles in the Metro-Goldwyn-Mayer musicals The Barkleys of Broadway (1949), starring Fred Astaire and Ginger Rogers, An American in Paris (1951), starring Gene Kelly, and The Band Wagon (1953), starring Fred Astaire and Cyd Charisse.

Levant was briefly married to Actress Barbara Woodell; they divorced in 1932. In 1939, Levant married for the second time, to singer and Actress June Gale (née Doris Gilmartin), one of the Gale Sisters. They were married for 33 years, until his death in 1972, and had three children: Marcia, Lorna, and Amanda.

1938 saw Levant make his debut as a music Conductor on Broadway, filling in for his brother Harry in sixty-five performances of George S. Kaufman and Moss Hart’s The Fabulous Invalid. In 1939 he was again working on Broadway as Composer and Conductor of The American Way, another Kaufman and Hart production.

From 1947 to 1949, Levant regularly appeared on NBC radio's Kraft Music Hall, starring Al Jolson. He not only accompanied singer Jolson on the piano with classical and popular songs, but often joked and ad-libbed with Jolson and his guests. This included comedy sketches. The pairing of the two entertainers was inspired. Their individual ties to George Gershwin—Jolson introduced Gershwin's "Swanee"—undoubtedly had much to do with their rapport. Both Levant and Jolson appeared as themselves in the Gershwin biopic Rhapsody in Blue (1945).

In the early 1950s, Levant was an occasional panelist on the NBC game show Who Said That?, in which celebrities would try to determine the speaker of quotations taken from recent news reports.

Between 1958 and 1960, Levant hosted a television talk show on KCOP-TV in Los Angeles, The Oscar Levant Show, which later became syndicated. It featured his piano playing along with monologues and interviews with top-name guests such as Fred Astaire and Linus Pauling. A full recording of only two shows is known to exist, one with Astaire, who paid to have a kinescope recording of the broadcast made so that he could assess his performance.

In 1960 Levant was awarded a star on the Hollywood Walk of Fame in recognition of his recording career.

He was the inspiration for the neurotic, womanizing Pianist "Henry Orient" in Nora Johnson's novel and subsequent Hollywood film, The World of Henry Orient (1964).

A lifelong heavy smoker, Levant died in Beverly Hills, California, of a heart attack in 1972 at age 65. His death was discovered by his wife June when she called him from their bedroom to meet for an interview with Candice Bergen, a photojournalist at the time. He is interred in the Westwood Village Memorial Park Cemetery in Los Angeles. In citing an old joke, comics tell an apocryphal story about Levant: that his epitaph reads, "I told them I was ill."