Araki was born in Los Angeles on December 17, 1959 to Japanese American parents. He grew up in nearby Santa Barbara, California and enrolled in college at the University of California, Santa Barbara. He graduated with a B.A. from UCSB in 1982. He later attended the University of Southern California's School of Cinematic Arts, where he graduated with a M.F.A. in 1985.
Araki made his directorial debut in 1987 with Three Bewildered People in the Night. With a budget of only US$5,000 and using a stationary camera, he told the story of a romance between a video artist, her sweet-heart and her gay friend. Two years later, Araki followed up with The Long Weekend (O' Despair), another film with a US$5,000 budget. His third film, The Living End, saw an increase to US$20,000. He had to shoot his early movies often spontaneously and lacking proper permits.
Despite the financial constraints, Araki's films received critical acclaim. He received awards from the Locarno International Film Festival and the Los Angeles Film Critics Association, with an additional nomination for a Sundance Film Festival award.
Araki's next three movies — Totally Fucked Up, The Doom Generation, and Nowhere — were collectively dubbed the "Teen Apocalypse Trilogy". The trio has been characterized as "... teen alienation, hazy sexuality and aggression." A former student of his at UC Santa Barbara, Andrea Sperling, co-produced the films with him.
The trifecta saw Araki work with increasingly more notable actors and actresses including Rose McGowan, Margaret Cho, Parker Posey, Guillermo Díaz, Ryan Phillippe, Heather Graham, and Mena Suvari among others.
The Trilogy received varying degrees of reviews, from a thumbs down and "zero stars" by Roger Ebert to "Literally the Best Thing Ever" by Rookie and being heralded as cult classics.
Araki's following film, Splendor, was both a response to the controversy surrounding his ongoing relationship with actress Kathleen Robertson (despite identifying as gay) and an homage to screwball comedies of the 1940s and 1950s. Hailed as the director's most optimistic film to date, it made its premiere at the 1999 Sundance Film Festival.
Araki's next project was the ill-fated MTV production This Is How the World Ends, which was originally planned with a budget of US$1.5 million. He viewed it as a chance to reach the masses through MTV's viewership and signed on to do the project despite the budget being cut to US$700,000. Araki wrote, directed, and shot the pilot episode, but ultimately MTV decided against the project and the effort never aired.
Following a short hiatus, Araki returned in 2004 with the critically acclaimed Mysterious Skin, based on the 1995 Scott Heim novel of the same name. This marked the first time that Araki worked with someone else's source material.
Araki's next feature was the stoner comedy Smiley Face, featuring Anna Faris, Adam Brody, and John Krasinski, written by Dylan Haggerty. It marked a stark change from the dark, heavy drama of Mysterious Skin, a change purposely planned by Araki. It received very favorable reviews, with some describing it as another of Araki's potential cult classics.
Kaboom marked Araki's tenth film and made its premiere at the 2010 Cannes Film Festival. It was awarded the first ever Queer Palm for its contribution to lesbian, gay, bisexual, and transgender issues.
One consistent feature of Araki's work to date is the presence of music from the shoegazing genre as film soundtracks, first seen on Totally Fucked Up and heavily so on the films Nowhere and Mysterious Skin. Both The Living End and Nowhere owe their titles to this shoegaze influence; The Living End after like-named The Jesus and Mary Chain song and Nowhere after Ride's album entitled Nowhere.
In 2010, Kaboom was named the first ever winner of the Cannes Film Festival Queer Palm. Araki has also been honored with the 2006 Filmmaker on the Edge Award at the Provincetown International Film Festival. In 2013, Araki was recognized by the Museum of Arts and Design in New York City with the retrospective God Help Me: Gregg Araki.
Araki has previously self-identified as "a gay Asian American". Contrary to the statement, beginning in 1997 he had a relationship with actress Kathleen Robertson, whom he directed in Nowhere. The relationship ended in 1999. Araki has since mainly dated men and now identifies as bisexual.