Waites was born in Philadelphia, Pennsylvania, the son of Michael and Anne Waites. He completed grade school at Immaculate Conception and then high school at Bishop Egan in Fairless Hills, Pennsylvania. After one year at Bucks County Community College, he received a full scholarship for acting at the Juilliard School in New York City, where he studied as a member of the Drama Division's Group 7 (1974–1978). Some of his classmates included Robin Williams, Christopher Reeve, and Frances Conroy. He received a B.A. degree in Writing from The New School and a Master of Fine Arts in Playwriting from the University of Iowa.

When Waites was 21 years old, he was offered two movies simultaneously: Snowbound, directed by Robert Young, and Pity the Poor Soldier (the title has subsequently changed), directed by Bill Jersey. Despite the fact that he was offered twice the money for Snowbound, Waites chose Pity the Poor Soldier because it was in celebration of the centennial of the American Revolutionary War. Next Waites originated the roll of Oliver Treefe in Simon Gray's world premiere of Molly, at the First Annual Spoleto Festival in Charleston, S.C. After this highly acclaimed performance he returned to NYC to be cast as the lead in the Joan Micklin Silver-produced On the Yard (1978), co-starring John Heard. Subsequently, he was offered a three-picture option deal with Paramount Pictures. After very strong critical notices Waites auditioned for and got the lead in Walter Hill's The Warriors (1979) playing the character Fox. After disputes with the Director, he was fired from this film. Subsequently, when the studio asked him where he wanted his billing he told them to remove his name completely, a decision Waites regrets. He has since reconciled with Walter Hill. Three weeks after being fired from The Warriors Tom auditioned with Al Pacino, and was cast as Jeff McCullough in the Norman Jewison film ...And Justice for All (1979). This began a long relationship with Pacino. The two worked together again in Shakespeare's Richard III, with Waites playing Richmond, where he received strong notices again. After that, Waites originated the role of Mitchell in Alan Bowne's Forty-Deuce Off-Broadway at the Perry Street Theatre. In 1982, Waites competed with Matt Dillon and Kevin Bacon to land the role of Bobby in David Mamet's Pulitzer Prize-winning play, American Buffalo. Kurt Russell and John Carpenter saw his performance and cast him as Windows in the film The Thing (1982). Waites was cast in the Broadway premiere of Trafford Tanzi, a musical where he sang with Deborah Harry of Blondie fame. Next was Pastorale, the Obie Award-winning play by Debra Eisenberg starring Judith Ivey and Christine Estabrook, playing the character of Steve.

In 1983, Waits joined The Mirror Theater Ltd’s Mirror Repertory Company, performing in numerous repertory productions Off-Broadway at St. Peters Church throughout various seasons. His work with The Mirror included one of the highlights of Tom's career: working with Geraldine Page in Clifford Odets' Paradise Lost in the role of Kewpie, originated by Elia Kazan.

The reviews from this show and a recommendation by Al Pacino got Tom the lead, Ralph in Clifford Odets' Awake and Sing! and Sing on Broadway with Actress Frances McDormand and actor Harry Hamlin. Tom was then cast in the lead role of Broud in The Clan of the Cave Bear (1986) with Daryl Hannah and James Remar. Terrible critical notices and a cold reception from the public combined to make Clan of the Cave Bear a less than career-building move. It was at this point that he met his Future wife, Lisa Greenberg, with whom he has two children: Samuel Jackson Waites and Michaela Kate Waites. Tom next played Otis the baby-stealer in ABC's All My Children for approximately 9 months, while performing Israel Horovitz's North Shore Fish at the WPA Theater in NYC alongside John Pankow, Christine Estabrook, Wendie Malick and Laura San Giacomo. Tom also made guest appearances in such popular television shows as Kojak (with Telly Savalas), Miami Vice and two episodes of The Equalizer. Tom played the role of Rob in Howard Korder's Search and Destroy on Broadway alongside Griffin Dunne. Tom appeared as Smittie in the film Light of Day (1987) opposite Michael J. Fox and Joan Jett, and was then cast as Al Capone, competing with actors like Harvey Keitel, for the film Gangland (1987) with Scott Glenn.

Tom next relocated to Los Angeles where he started the theatre company, TomCats. This is where he began his directing career. After two guest star appearances on NYPD Blue and some minor roles in small independent films and television shows, including a guest star in Buffy the Vampire Slayer, Mike Hammer, Private Eye with Stacy Keach and Slither. At this time, Tom established himself as a top acting Teacher. He opened the TGW Acting Studio in 2000 and his school continues to thrive today. He has coached such actors as Alfred Molina, Vinnie Pastore, Vinessa Shaw, Tim Guinee, Oliver Hudson and Jamie Harris. TGW Acting Studio was named the top school to study acting in New York City by Backstage in 2015. Tom directs and produces Off-Off-Broadway plays at his studio. Upon returning to New York, he directed the Off-Broadway hit Six Goumbas and a Wannabe, starring Annie McGovern and Kathrine Narducci. He also directed Golden Ladder (with Amy Redford) and numerous other Off and Off-Off-Broadway productions.