Peele was born in New York City, New York, and raised by his single mother, Lucinda Williams, on Manhattan's Upper West Side. His mother is white and his father is black. He attended P.S. 87 in Manhattan and went on to Sarah Lawrence College before dropping out after two years to form a comedy duo with his college roommate and future Key & Peele comedy writer Rebecca Drysdale.
Peele regularly performed at Boom Chicago in Amsterdam and The Second City in Chicago. He and Nicole Parker were well known for their musical duets at Boom Chicago. He portrayed a popular character called "Danish Supermodel Ute" during his Time at Boom Chicago and hosted MTV's Comedy Weekend in 2002.
Peele appeared on the Comedy Bang! Bang! podcast as disqualified American Idol singer Jermaine Jones alongside Gillian Jacobs of Community.
In 2003, Peele joined the cast of MADtv for its ninth season. Around the time Keegan-Michael Key joined the cast as a featured performer, it was assumed that Key would be chosen over Peele. The two of them ultimately were cast together after showing great comedic chemistry. Peele performed celebrity impersonations, which included favorites Caroll Spinney (as the voice of Big Bird), Ja Rule, James Brown, Flavor Flav, Justin Guarini, Montel Williams, Morgan Freeman, and Forest Whitaker.
Peele was absent from the first four episodes of his second season on MADtv. He made a cameo in "Weird Al" Yankovic's video "White & Nerdy" with MADtv co-star Keegan-Michael Key.
Peele was nominated for a 2008 Emmy for his song "Sad Fitty Cent", a music video parody about 50 Cent lamenting over his rivalry with Kanye West. The lyrics were, according to the music video, written by Peele, and he was involved in arranging its music. In 2009 he appeared in Little Fockers.
Peele appeared in a viral video titled "Hillary vs Obama" (which was shown as a MADtv sketch) where he and a Hillary Clinton supporter (played by short-term cast member Lisa Donovan) argue over whether Hillary Clinton or Barack Obama would make a better president, only to get upstaged by a Rudy Giuliani supporter (played by Donovan's brother, Ben). Peele auditioned to be a castmember for Saturday Night Live when SNL producers were looking for someone to play Barack Obama (around the time when SNL and MADtv — and other scripted shows — were put on hiatus due to the 2007–2008 Writers Guild of America strike). Peele remained at MADtv, and the role went to Fred Armisen until September 2012, when Jay Pharoah took over the role.
After five seasons on MADtv, Peele left the cast at the end of the 13th season.
In 2010, Peele co-starred in the Fox comedy pilot The Station, and appeared with a recurring role in the Adult Swim series Childrens Hospital. He had a supporting role in the David Wain-directed comedy Wanderlust, which was released in 2012.
Peele and his former MADtv castmate and friend Keegan-Michael Key starred in their own Comedy Central sketch series Key & Peele, from 2012 to 2015. In 2016, the pair starred in and produced their first film Keanu.
Peele and Key have starred in two episodes of Epic Rap Battles of History. The first featured Peele as Martin Luther King Jr and Key as Mahatma Gandhi, while the second featured Peele as Muhammad Ali and Key as Michael Jordan.
Peele also appeared in a parody music video with Jane Lynch for Americans United for Separation of Church and State, playing the role of "state" in the process of breaking up with Lynch's "church". Together with Key, he played an FBI agent in a recurring role in the 2014 FX crime drama Fargo. In an interview with People magazine, Peele stated that he wanted both his and Key's roles to add comic relief to the show.
Key and Peele will be working with Judd Apatow on a feature-length film for Universal Pictures.
In February 2017, Peele's first film as director, Get Out, was released to critical acclaim, and grossed over $250 million on a budget of $4.5 million. Peele will produce the HBO series Lovecraft Country written by Underground co-creator Misha Green, which will be shown through the lens of supernatural horror.
As a comedian, Peele counts among his influences In Living Color, Richard Pryor and Dave Chappelle. In February 2017, Peele curated the Brooklyn Academy of Music film series "The Art of the Social Thriller", comprised of 12 films that inspired the making of Get Out, including the horror films Rosemary's Baby, Night of the Living Dead, The Shining, Candyman, The People Under the Stairs and Scream, the thrillers The Silence of the Lambs, Funny Games and Misery, and Rear Window, the comedy-thriller The 'Burbs, and the 1967 racial comedy-drama Guess Who's Coming to Dinner.
Peele began dating Chelsea Peretti in 2013. They became engaged in November 2015, and, in April 2016, Peretti announced that she and Peele had eloped at an unspecified date.
On July 1, 2017, Peretti gave birth to their first child, Beaumont Gino Peele.