Church was born in Yolo, California, the son of Maxine (née Sanders) and Carlos "Carl" Richard McMillen (1936–2008), who served for eight years in the Marines and saw action in the Korean War; after 1962, Carlos worked as a surveyor. Church's parents divorced and his mother moved to Texas. She remarried in 1969, to widower George A. Quesada, a veteran of an Army Air Forces reconnaissance unit which served in Guam in World War II. Church took his stepfather's surname for a time but changed it to "Haden Church" based on other relatives when people found Quesada difficult to pronounce. He left high school in 1977 to work in the oil fields of Louisiana, but he returned to graduate from Harlingen High School in 1979. He attended the University of North Texas while living in Dallas.

Church started in the entertainment Business as a radio personality and doing voice-over work. He changed his name to "Thomas Haden Church", taking "Haden" and "Church" from his ancestry. After appearing in an independent film, he moved to California to pursue an acting career. His character delivers a last love letter from "Eddie Labec" to "Carla" in the Cheers episode, "Death Takes a Vacation on Ice". He played the part of slow-witted aircraft mechanic Lowell Mather for six seasons (1990–95) on the NBC sitcom Wings.

Church bought a ranch in Texas in 1998. In late 2000 he took a break from films. After having small roles in films such as Monkeybone and 3000 Miles to Graceland, he made his directorial debut with Rolling Kansas in 2003. He has voiceover work in commercials, such as for Merrill Lynch and Icehouse beer.

In 2003, Director Alexander Payne called him regarding the role of "Jack", the selfish best friend to Paul Giamatti's character, in Sideways. During the audition, Church stripped naked to read the audition scene, later saying "To me, it was painfully obvious... I was reading the scene where Jack comes in naked and there has to be in-born vulnerability in the scene." (He later found that he was the only actor to strip down for the audition). Sideways earned acclaim for Church. He won an IFP Independent Spirit Award and was nominated for the Academy Award for Best Supporting Actor.

Church has received multiple awards and nominations for his roles in both television and film. He's earned an Academy award for Best Supporting Actor in 2005 for his role as Jack in Sideways (2004), two Golden Globe award nominations for Best Supporting Actor in 2004 for the film Sideways (2003), and 2007 for the miniseries Broken Trail (2006), won a Primetime Emmy award for Outstanding Supporting Actor in a Miniseries or Movie in 2007 for Broken Trail, received one of three Screen Actors Guild award nominations in 2005 for Outstanding Performance by an Ensemble in a Motion Picture for Sideways (2004).

He has since appeared in films such as Idiocracy, done voice-over work on films such as Over the Hedge and starred in one of AMC's highest rated television productions, Broken Trail, with Robert Duvall, in 2006, for which he won an Emmy. In 2007, he appeared as the tragic villain Sandman in Sam Raimi's Spider-Man 3 starring Tobey Maguire and Kirsten Dunst.

Church lives on his 2,000-acre (810 ha) ranch in Kerrville, Texas. He has two children from a former relationship with Mia Zottoli, but was never married to her or anyone else despite a 2008 article in the LA times incorrectly claiming he was married to his partner. Church's biological Father Carl died in 2008, and his stepfather George in 2012.