Douglas was born as Gerald Rubenstein in Chelsea, Massachusetts to Jewish immigrants from Eastern Europe. He was raised in Chelsea, Massachusetts, Douglas went to Brandeis University to earn a degree in economics. Eight months into law school in Manhattan, he gave up the books and started auditioning. However, his lack of training frustrated him, and he eventually moved then-wife, actress Arlene Martel, and their daughter Avra Douglas to California.Both parents were born in Massachusetts. His paternal and maternal grandparents were immigrants. (source: Birth record and genealogy research.)
Settling in the San Fernando Valley, Douglas sold insurance by day and took acting classes at night. Although he still struggled, he received encouragement after appearing in the play, John Brown's Body. A critic said he was terrific, which inspired him to hire an agent.
For several years, Douglas appeared on TV shows like Mission: Impossible and The Feather and Father Gang, often playing the villain. At the same time, his wife decided to move herself and their children—including son Jodaman Douglas (aka journalist and designer, Jod Kaftan)—up to Carmel.
In an attempt to save his marriage to Arlene, Douglas quit acting and followed her. Despite this, the couple eventually divorced and Douglas returned to Los Angeles to continue his career.
Soon after, he found himself embroiled in a custody battle for his son Jod, which he won.
Today, Douglas is remarried, to Kymberly Bankier, whom he met at a Muscular Dystrophy Association event. Although she is over twenty-six years younger than he is, they have been married since April 6, 1985 and have a young son, Hunter, together.
In March 2006, after 25 years on the show, Douglas departed The Young and The Restless in a storyline-dictated exit revolving around his character's involvement in the Tom Fisher murder case. Jerry Douglas claims that former headwriter of The Young and The Restless, Lynn Marie Latham, killed his character because she could not understand why a man would run a cosmetics company. To viewers' surprise, he continued to recur on the show for the next few months and was put back on contract with the show in June to play his now deceased character's ghost. He left the show for good on August 18, but continues to make appearances once in a while. In March 2008 he began appearing as a new character Alistair Wallingford, a drunken hack actor involved in a gaslighting plot, but was written out a few months later.
In 2007, Douglas released a CD, The Best Is Yet to Come, a collection of jazz standards, and is performing around the United States and Canada.