Spader was born in Boston, Massachusetts, and is the youngest of three children. His parents Jean (née Fraser) and Stoddard Greenwood "Todd" Spader were both teachers. Spader grew up in a liberal and progressive home, saying regarding his mother and two sisters, “I was always around dominant and influential women, and that left a great impression". During his early education, he attended multiple private schools, including The Pike School, where his mother taught art, and the Brooks School in North Andover, Massachusetts, where his father taught. He later transferred to Phillips Academy before dropping out at the age of seventeen and moving to New York City to pursue his acting career. On his way to becoming a full-time actor, Spader undertook jobs such as bartending, teaching yoga, driving a meat truck, loading railroad cars, and being a stable boy.
Spader's first major film role was in the film Endless Love (1981), and his first starring role was in Tuff Turf (1985). However, he did not rise to stardom until 1986, when he played the rich, arrogant playboy Steff in Pretty in Pink. He co-starred in Mannequin (1987) and the film adaptation of Less Than Zero (1987), in which he played a drug dealer named Rip. Supporting roles in films such as Baby Boom (1987) and Wall Street (1987) followed until his breakthrough in Sex, Lies, and Videotape (1989), in which he played a sexual voyeur who complicates the lives of three Baton Rouge, Louisiana residents. For this performance, he received the Best Actor Award at the Cannes Film Festival.
Spader's roles in the early 1990s included a young, affluent widower opposite Susan Sarandon in the romantic drama White Palace (1990), Rob Lowe in the Noir drama Bad Influence (1990), John Cusack's best friend in the drama True Colors (1991), and a poker-playing drifter in The Music of Chance (1993). In 1994, he starred as Egyptologist Daniel Jackson in the sci-fi film Stargate. In 1996, he played car accident fetishist James Ballard in the controversial Canadian film Crash and assassin Lee Woods in 2 Days in the Valley. In 1997, Spader guest starred in the Seinfeld episode "The Apology", as an angry recovering alcoholic who refuses to apologize to George for making fun of him. In 2000, he played a drug-addicted detective tracking down a serial killer in The Watcher. In 2002, he starred as a sadistic boss in Secretary.
From 2004 to 2008, Spader starred as Alan Shore in the series Boston Legal, in which he reprised his role from the television series The Practice. He won the Emmy Award for Outstanding Lead Actor in a Drama Series in 2004 for his portrayal on The Practice and won it again in 2005 and 2007 for Boston Legal. With the 2005 win, he became one of only a few actors to win an Emmy award while playing the same character in two different series. Even rarer, he won a second consecutive Emmy while playing the same character in two different series. He also won the Satellite Award for Best Actor in a Series, Comedy or Musical for Boston Legal in 2006.
In October 2006, Spader narrated "China Revealed", the first episode of Discovery Channel's documentary series Discovery Atlas. He has also done the voice-over in several television commercials for Acura. He starred in Race, a play written and directed by David Mamet, which opened on December 6, 2009 at the Ethel Barrymore Theatre on Broadway. The show closed on August 21, 2010 after 297 performances. In March 2011, he was named to star in the film By Virtue Fall, written and to be directed by Sheldon Turner. As of June 2011, the movie was in pre-production.
Spader guest starred as Robert California in "Search Committee", the season 7 finale of The Office. On June 27, 2011, it was announced that he would join the cast on a permanent basis. He planned to stay only through the eighth season, and while the original plan was just to do the guest appearance, executive producer Paul Lieberstein said: "those two scenes became a season".
Spader stars in the NBC series The Blacklist, which premiered on NBC September 23, 2013. He portrays Raymond "Red" Reddington, one of the FBI's most wanted fugitives. He also played villainous robot Ultron in Avengers: Age of Ultron (2015).
Spader met his first wife, decorator Victoria Kheel, while working in a yoga studio after he moved to New York City in the 1980s. They married in 1987 and have two sons, Sebastian (born 1989) and Elijah (born 1992). Spader filed for divorce from Kheel in 2004. He began dating his former Alien Hunter (2003) co-star, Leslie Stefanson, in 2002; they have one son, Nathaneal (born August 2008).