Salt was born in Chicago, Illinois, the son of Winifred (née Porter) and william Haslem Salt, an Artist and Business executive. He graduated from Stanford University in 1934. The first of the nineteen films he wrote or participated in writing, was released in 1937 with the title The Bride Wore Red. He joined the American Communist Party in 1938, and was a civilian consultant to the U.S. Office of War Information during World War II.

Salt's career in Hollywood was interrupted when he was blacklisted after refusing to testify before the House Committee on Un-American Activities in 1951. Like many other blacklisted Writers, while he was unable to work in Hollywood Salt wrote pseudonymously for the British television series The Adventures of Robin Hood. After the collapse of the blacklist, Salt won Academy Awards for Best Writing, Screenplay Based on Material from Another Medium for his work on Midnight Cowboy and Coming Home, and a nomination for Serpico.

Salt was married three times, first to Actress Mary Davenport with whom he had two children, actress/writer/producer Jennifer, and Deborah. After his divorce from Davenport, he married Gladys Schwartz and later Playwright Eve Merriam. He remained married to Merriam until his death in Los Angeles, aged 72, on March 7, 1987.

Waldo Salt was the subject of a 1990 documentary Waldo Salt: A Screenwriter's Journey, which featured interviews with Dustin Hoffman, Robert Redford, Jon Voight, John Schlesinger and other collaborators and friends.

The Waldo Salt Screenwriting Award, first presented in 1992, is awarded at the Sundance Film Festival annually. It is determined by the dramatic jury, and recognizes outstanding screenwriting in a film screened at the festival that year. See List of Sundance Film Festival award winners for a list of winners.