Otto's passion for painting was his first connection into the arts. After pursuing Advertising Design at the Fashion Institute of Technology in New York City, 1987 to 1989, then fine arts at the Columbus College of Art and Design, in Columbus, Ohio, on a scholarship, his passion shifted into theater. Returning to New York City in 1991, he studied acting under Jeanne Kaplan and Austin Pendleton at HB Studio. In 1996 he landed his breakthrough role Carmen "Chico" Guerra on the HBO series Oz.

In 2004 he co-starred opposite John Ventimiglia of The Sopranos in the role of Wallace, in the Off-Broadway play Ponies, produced by Emmy award-winner Michael Imperioli at Studio Dante in New York City.

Sanchez has also appeared on stage. His last part was in November 2008, in the world premiere of Beau Willimon's political play Farragut North (now adapted into the film Ides of March) directed by Doug Hughes (Doubt) at the Atlantic Theater Company in New York City in the dual role of Frank/Waiter opposite John Gallagher, Jr.

"In one of the play's sharpest moments a waiter played by Otto Sanchez earnestly tells Stephen about his hard-luck American life, and you can see Stephen (John Gallagher, Jr.) translating it into a stump-speech anecdote in his head." — Ben Brantley, NY Times.