Gaidai was born on January 30, 1923 in Svobodny, Amur Oblast where he is commemorated by a statue. His father Iov Isidorovich Gaidai came from a Ukrainian family of serfs of the Poltava Governorate. At the age of 22 he was sentenced to several years of katorga for revolutionary activity and sent to the Far East to work at the railway. Leonid's mother Maria Ivanovna Lubimova was born in the Ryazan Oblast to Russian parents. She met Iov through her brother Egor, also a katorga worker who sent her a photo of his friend along with a marriage proposal. After Gaidai's term expired, they settled down in the Amur Oblast where Gaidai continued working at the railway building site.
Leonid was the third child in the family. His elder brother Aleksandr (1919–1994) was a well-known poet and a war correspondent. Leonid took part in amateur dramatics since the young age. He graduated from school on August 20, 1941. In just two days the Great Patriotic War started. In February 1942 he was enrolled to the Red Army. He first served in Mongolia, then finished sergeant courses, becoming a squad leader. He worked in the military intelligence. On December 20, 1942 Gaidai was awarded the Medal for Battle Merit for destroying three Nazi soldiers and taking hostages during the battle for Enkino village. On March 20, 1943 he was heavily injured after stepping on a land mine. He spent nine months in military hospitals. In January 1944 he was sent home as war-disabled.
Leonid Gaidai attended the Moscow Institute of Cinematography. He married the actress, Nina Grebeshkova, who played minor roles in his future films. His first success came 6 years after graduation, with a segment of the Short film collection "Sovershenno seryozno" (1961), which instantly became highly popular. In this movie Gaidai first introduces a comic trio of crooks – Yuri Nikulin, Georgy Vitsin, and Evgeny Morgunov who later appear in several of his other films. After his characters and directing style won the public's love, his name gained massive selling power in USSR's movie theatres.
Between 1961 and 1975, Gaidai directed a number of top-selling movies, each one a huge financial success and becoming wildly popular in the Soviet Union. During these years, he filmed new adventures of the mischievous trio in The Bootleggers (1961), a film adaptation of O. Henry's short stories, Business People (1962), Operation Y and Other Shurik's Adventures (1965), and Kidnapping, Caucasian Style (1966). Following his break with Morgunov, Gaidai disbanded the trio, while casting Nikulin in what was to become the most popular Soviet comedy ever made, The Diamond Arm (1968).
In the 1970s, Gaidai worked primarily with the comedians from his own studio group, which included Vitsin, Leonid Kuravlev, Mikhail Pugovkin, Savely Kramarov, Natalya Seleznyova, Natalya Krachkovskaya, and his wife Nina Grebeshkova. All this cast was featured in his film adaptation of Mikhail Zoshchenko's short stories, Impossible! (1975). He also filmed a play by Mikhail Bulgakov, Ivan Vasilievich: Back to the Future (1973), Ilf and Petrov's The Twelve Chairs (1971), Nikolai Gogol's The Government Inspector (1977), and Borrowing Matchsticks (1980), a story by the Finnish author Maiju Lassila.
Gaidai's top-grossing movie The Diamond Arm sold 76.7 million tickets in the Soviet Union alone, becoming the third highest-grossing Soviet film. At $8 per ticket (regular fare in an American movie theatre in 2005), it would have generated revenue comparable to the US box office champion Titanic. It was followed closely by Gaidai's other comedy films — Kidnapping, Caucasian Style (fourth place with 76.5 million viewers), Operation Y and Other Shurik's Adventures (seventh place with 69.6 million viewers) and Ivan Vasilievich: Back to the Future (17th place with 60.7 million viewers).
Due to the state-controlled nature of USSR movie industry, all revenue from movie sales went back into the state coffers. However, Gaidai personally received a small percentage of ticket sales as a government incentive. This didn't last long, though, since it soon became apparent that even with the tiny royalty offered he would quickly become a legal Soviet multimillionaire.
After 1975, Gaidai went into a period of significant decline; his only other notable work was a joint Soviet-Finnish film Borrowing Matchsticks (Russian: За спичками; Finnish: Tulitikkuja lainaamassa), completed in 1980. After the collapse of the Soviet Union, he directed only one more movie, capitalizing on the early Perestroika business activities and starring Dmitry Kharatyan. Gaidai has a cameo in the final one, There's Good Weather in Deribasovskaya, where he plays an old gambler who tries to beat the one-armed bandit. In real life, Gaidai was addicted to gambling. These proved the most popular of his works filmed after 1975 but lacked the success of his earlier work. Gaidai was made a People's Artist of the USSR several months before the Union's demise and died in Moscow on Friday November 19, 1993. He was buried at the Kuntsevo Cemetery.
Gaidai remains most famous for the outstanding string of comedies he directed between 1961 and 1975, when 9 of the 10 movies he made became Russian classics, selling between 20 and 76 million movie tickets each, and becoming box office champions for several years in a row. Gaidai was a master of fast-paced comedy, his style and rhythm somewhat similar to Stanley Kramer's It's a Mad, Mad, Mad, Mad World. He is less known outside of the former Soviet Union, due to the specific nature of his comedies, intrinsically tied to Soviet culture and lifestyle – unlike the motives of the characters of Kramer's "Mad World" being easily understood by the Russian public, living in the highly materialistic world of late Soviet Union. Gaidai's only international recognition was a nomination for best short film at the 1961 Cannes Film Festival for Dog Barbos and Unusual Cross.