Busey was born in Goose Creek, Texas, the son of Sadie Virginia (née Arnett), a homemaker, and Delmer Lloyd Busey, a construction design manager. He graduated from Nathan Hale High School in Tulsa, Oklahoma, in 1962. While attending Pittsburg State University in Pittsburg, Kansas, on a football scholarship, he became interested in acting. He then transferred to Oklahoma State University in Stillwater, Oklahoma, where he quit school just one class short of graduation.
Busey began his show business career as a drummer in The Rubber Band. He appears on several Leon Russell recordings, credited as playing drums under the names "Teddy Jack Eddy" and "Sprunk", a character he created when he was a cast member of a local television comedy show in Tulsa, Oklahoma, called The Uncanny Film Festival and Camp Meeting on station KTUL (which starred fellow Tulsan Gailard Sartain as "Dr. Mazeppa Pompazoidi"). For his skits on Uncanny Film Festival, Busey drew on his American Hero, belligerent, know-it-all character. When he told Gailard Sartain his character needed a name, Sartain replied, "Take three: Teddy, Jack and Eddy."
He played in a band called Carp, which released one album on Epic Records in 1969. Busey continued to play several small roles in both film and television during the 1970s. In 1975, as the character "Harvey Daley," he was the last person killed on the series Gunsmoke (in the third-to-last episode, No. 633 – "The Busters").
In 1974, Busey made his major film debut with a supporting role in Michael Cimino's buddy action caper Thunderbolt and Lightfoot, starring Clint Eastwood and Jeff Bridges.
In 1976, he was hired by Barbra Streisand and her producer-boyfriend Jon Peters to play Bobby Ritchie, road manager to Kris Kristofferson's character in the remake film A Star is Born. On the DVD commentary of the film, Streisand says Busey was great and that she had seen him on a TV series and thought he had the right qualities to play the role.
In 1978, he starred as rock legend Buddy Holly in The Buddy Holly Story with Sartain as The Big Bopper. For his performance, Busey received the greatest critical acclaim of his career and the movie earned Busey an Academy Award nomination for Best Actor and the National Society of Film Critics' Best Actor award. In the same year he also starred in the small yet acclaimed drama Straight Time and the surfing movie Big Wednesday, which is now a minor cult classic.
In the 1980s, Busey's roles included the critically acclaimed western Barbarosa, the comedies D.C. Cab and Insignificance, and the Stephen King adaptation Silver Bullet. He played one of the primary antagonists opposite Mel Gibson and Danny Glover in the action comedy Lethal Weapon.
In the 1990s, he had prominent supporting roles in successful action films such as Predator 2, Point Break and Under Siege. He also appeared in Rookie of the Year, The Firm, Black Sheep, Lost Highway, and Fear and Loathing in Las Vegas.
Busey sang the song "Stay All Night" on Saturday Night Live in March 1979 (season 4, episode 14), and on the Late Show with David Letterman in the 1990s.
In 2003, Busey starred in a Comedy Central reality show, I'm with Busey. In 2005, he also voiced himself in an episode of The Simpsons and appeared in the popular miniseries Into the West. Busey controversially appeared in the 2006 Turkish nationalist film Valley of the Wolves: Iraq, (Kurtlar Vadisi: Irak, in Turkish), which was accused of fascism, anti-Americanism and anti-Semitism.
In 2007, he appeared as himself in a prominent recurring role on HBO's Entourage, in which he parodied his eccentric image, ultimately appearing on three episodes of the show.
In 2008, he joined the second season of the reality show Celebrity Rehab with Dr. Drew. Busey returned to reality television in Celebrity Apprentice 4, which premiered in March 2011, and appeared again in Celebrity Apprentice 6. There, he briefly reprised his role as Buddy Holly by performing "Not Fade Away".
In a series of 2010 YouTube advertisements for Vitamin Water, Busey appeared as Norman Tugwater, a lawyer who defends professional athletes' entitlements to a cut from Fantasy Football team owners.
In 2014, he became a celebrity spokesperson for Amazon Fire TV. That August, he appeared in, and became the first American winner of the fourteenth series of the UK version of Celebrity Big Brother.
On September 1, 2015, it was announced that he will be competing on the 21st season of Dancing with the Stars. He was paired with professional dancer Anna Trebunskaya. Busey and Trebunskaya made it to Week 4 of competition but were then eliminated and finished in 10th place.
In 1971, Busey's wife Judy Helkenberg gave birth to their son, William Jacob "Jake" Busey. Busey and Helkenberg divorced when Jake was 19 years old. Busey has a daughter named Alectra from a previous relationship.
In February 2010, Busey's fiancee Steffanie Sampson gave birth to their son, Luke Sampson Busey.
On December 4, 1988, Busey was severely injured in a motorcycle accident in which he was not wearing a helmet. His skull was fractured, and doctors feared he suffered permanent brain damage.
During the filming of the second season of Celebrity Rehab in 2008, Busey was referred to psychiatrist Dr. Charles Sophy. Sophy suspected that Busey's brain injury has had a greater effect on him than realized. He described it as essentially weakening his mental "filters" and causing him to speak and act impulsively. Sophy recommended Busey take valproic acid (Depakote), with which Busey agreed.
In 1996, Busey publicly announced that he was a Christian, saying: "I am proud to tell Hollywood I am a Christian. For the first time I am now free to be myself." This return to Christianity occurred as a result of his motorcycle accident, as well as a 1995 cocaine overdose.
In 1997, Busey underwent successful surgery remove a cancerous, plum-sized tumor from his sinus cavity. The congenital growth was found after Busey began suffering nose bleeds.
In 2011, Busey supported Donald Trump's 2012 presidential bid saying, "For the American people, vote for Donald Trump come election night." In 2015, he again expressed support for Trump's candidacy for president.2002: Grand Theft Auto: Vice City (voice)
2006: Grand Theft Auto: Vice City Stories (voice)
2008: Saints Row 2 (voice)
2016: Hitman (voice and likeness) (uncredited)