The band members grew up in Orange County. Rodney Sheppard played in a number of reggae bands, including working with Future Good Charlotte Drummer Dean Butterworth. In the late 1980s, prior to Sugar Ray, Sheppard and Stan Frazier played together in a band under the name The Tories. Later additions Murphy Karges, Craig Bullock and Mark McGrath changed the band's name to Shrinky Dinx – they were initially named Shrinky Dinks. After signing with Atlantic Records, the name was changed to Sugar Ray upon threat of a lawsuit from the Milton Bradley Company, maker of the Shrinky Dinks toy.

The band's debut album, Lemonade and Brownies, was released in 1995 and though it failed to produce a major hit single it did earn them recognition in alternative circles. Their early work features elements of funk metal, punk rock and alternative rock.

Sugar Ray's first mainstream hit came in the summer of 1997 with their song "Fly", which was released from the album Floored and featured reggae musician Super Cat. "Fly" did not sound anything at all like the rest of the tracks on the album and received frequent radio play, resulting in a number one rank on the Billboard's Airplay List. As a result of the success of "Fly", Floored sold well and was certified double platinum. However, by the end of 1997, critics were skeptical that Sugar Ray could put out another successful song and labeled them a one-hit wonder. The same year, Sugar Ray was featured in the movie Father's Day, starring Billy Crystal and Robin Williams. Floored featured nu metal elements and was their last album to contain heavy metal riffs before they moved to a more pop rock direction.

Their 1999 album 14:59 was the band's reply to suggestions that they were a one-hit wonder, with the title implying that their 15 minutes of fame were not quite up — their "fame clock" read 14:59. "Every Morning", which was widely compared to "Fly", had similar success during the spring of 1999, reaching number 3 on the U.S. Billboard Hot 100 chart. Their follow-up single "Someday" also enjoyed extensive airplay later that year and reached number 7 in the U.S. The next follow-up single "Falls Apart (Run Away)" reached number 29 in early 2000. 14:59 outsold its predecessor and was certified triple platinum. The band toured in support of the album, most notably performing at Woodstock 99. After 14:59 in 2000, Sugar Ray teamed up with The Alkaholiks to contribute the track "Make Room" on the Rap Rock collaboration album, Loud Rocks, with other artists with a similar style such as Crazy Town and Incubus.

In 2000, Sugar Ray did a cover version of John Cale and Brian Eno's song "Spinning Away" for the Soundtrack to the film The Beach. Their 2001 self-titled album Sugar Ray produced another hit with "When It's Over", which, although it failed to achieve the same level of success as their previous singles, still reached number 13 in the U.S. Other singles such as "Answer the Phone", "Under the Sun" and "Words to Me" gained some popularity as well. Sugar Ray also made several movie appearances, including Scooby-Doo in 2002.

Sugar Ray's 2003 effort In the Pursuit of Leisure, and the first single from the album, "Mr. Bartender (It's So Easy)", received a lukewarm reception. The album also contained the band's cover of Joe Jackson's famous "Is She Really Going Out With Him?". ProHoeZak guested live with the band in 2003 having appeared on "Mr. Bartender (It's So Easy)". In 2005, Sugar Ray released a greatest hits album, with three new songs, "Shot of Laughter", "Time After Time", and "Psychedelic Bee".

On May 19, 2008, the band announced they would be entering the studio to record their first album of new material since 2003. Jason Bernard, a friend of the band (who also happened to be a music producer) brought them a deal to sign with his label. It was announced that the band signed Pulse Recordings and that the new album should be released in the summer of 2009. On March 6, 2009, Mark McGrath announced that the new album would be titled Music for Cougars. It was released on July 21, 2009. The first single was "Boardwalk".

On August 22, 2010, Sugar Ray's Twitter page announced that Craig "DJ Homicide" Bullock had left the band. In 2011, the band had what McGrath described as not "the highest-grossing year for Sugar Ray". Murphy Karges and Stan Frazier also left, one not wanting to tour anymore, and the other taking a job with Aaron Rodgers, a quarterback who had started up a Christian rock record label. This left McGrath and Rodney Sheppard as the remaining original members. The band recruited replacements in percussionist Al Keith, Bassist Justin Bivona and Drummer Jesse Bivona. The Bovinas, who are twins, had been replacement members in the past.

In 2012, McGrath worked with Art Alexakis, frontman and vocalist of the band Everclear, on starting up a 1990s nostalgia tour, something they had discussed in the past but had always felt was too soon to be successful. The result was the "Summerland" tour, featuring a line-up of alternative rock bands that "at least had a big hit or two" in the 1990s, containing McGrath and Alexakis's own bands along with Marcy Playground, Gin Blossoms, and Lit. The tour was deemed a success, and McGrath initially spoke of the possibility of it becoming a yearly event. Over the course of the tour, McGrath stated that he had been spending downtime writing new material, although he was not sure at that point if it would be Sugar Ray material, or "Mark McGrath solo" material. By the end of the year, McGrath confirmed the band would start recording new material for an EP in January 2013, aiming for a May release or before the band's summer touring in 2013. However, percussionist Al Keith left the band while they were preparing to record new material, delaying the recording sessions, and leaving Sugar Ray as a four-piece band.

On November 9, 2013, Sugar Ray was to play a benefit for the Greater Los Angeles Fisher House at West LA's Wadsworth Theater.

The band continued its "Under the Sun" tour through 2014. However, in June 2014, McGrath revealed that the band had been struggling with legal wranglings with Karges and Frazier since their departure in 2012, and that there will never be another Sugar Ray album. However, Mark confirmed via Twitter that he would be releasing a solo EP during the summer in 2015.