Lister was born in Pine Bluff, Arkansas, on June 24, 1958. The Lister family moved out of the south to Los Angeles, California. Tom Lister Jr. was born blind with a detached and deformed retina in his right eye. He avoided the local gang life by developing an interest in films and religion instead. He attended Palomar Junior College before transferring to Long Beach City College for his sophomore year. While at Long Beach, he recorded a 52' shot put throw, which helped to earn him a scholarship to California State University at Los Angeles. In his senior year, he won the National shot put title with a mark of over 61 feet 8 inches (18.8 m).

Lister was the 1982 NCAA Division II National Shot Put Champion, and currently, the Cal State LA athletic department sponsors an annual track meet in his name. After college, Lister competed for the Converse Track Club, eventually raising his shot put mark to 64 feet 3 inches (19.58 m), before trying out with the New Orleans Breakers of the United States Football League. He was cut after two exhibition games, and opted to pursue acting instead.

After the Survivor Series, the feud between Hulk Hogan and Brutus Beefcake versus Randy Savage and Zeus ended with a steel cage match on December 27, 1989 at the No Holds Barred pay-per-view event. Hogan and Beefcake were once again victorious in what would be Zeus's last match in the WWF. Lister's final WWF appearance was a promotional spot for the 1990 Royal Rumble.

Lister also spent a short time in World Championship Wrestling (WCW) as Z-Gangsta, as part of The Alliance to End Hulkamania in March 1996, culminating at Uncensored. He debuted the previous week with fellow actor/wrestler Robert Swenson, who was billed as The Ultimate Solution.

Lister is an evangelical born-again Christian. In 1999, he and Darryl Strawberry appeared on evangelist Benny Hinn's TV program on the Trinity Broadcasting Network, in which they gave their testimonials. Afterward, Hinn laid hands on Lister and prophesied over him, "God is calling you to reach out to young people and will bless your acting career to do it." Since then, Lister has made numerous appearances on faith-based networks and speaks to urban youth and at church functions across the country. He became a member of a Christian church named The Light of the World.

In the Quentin Tarantino film Jackie Brown, he played bail agent Winston, who "finds people who don't want to be found". Lister briefly appears in the 2008 film The Dark Knight as a convict caught in one of the Joker's schemes. In 2015, Lister filmed Busy Day in Albuquerque, New Mexico. The film was produced by Tamás Nádas. Lister had a supporting role in the 2016 Disney animated movie Zootopia as the voice of the diminutive fennec fox, Finnick. He also appeared in a commercial that year for Ball Park-brand beef jerky, advertised as "tough, but tender."

On August 31, 2012, Lister agreed to plead guilty to conspiring to commit mortgage fraud, in a scheme that led to $3.8 million in losses. He was charged with fraudulently buying homes in order to withdraw $1.1 million in home equity loans. As of April 2014, he was out on bail and confident of avoiding prison, saying "What’s so cool about God and our government is that you can make a mistake and they will forgive you if you are just a good person and doing right.”