Lee was born in Riverside, California, to Toshio and Delma Lee. He attended John W. North High School in Riverside.
Considered a four-star recruit by Rivals.com, Lee was listed as the No. 5 shooting guard and the No. 47 player in the nation in 2008.
Lee was named to the All-Pac-10 first team and Pac-10 All-Defensive team in his junior year at UCLA in 2011. He declared for the NBA draft after the season against the advice of UCLA coach Ben Howland. ESPN, Fox Sports, and Yahoo also questioned Lee's decision.
Lee was drafted in the second round of the 2011 NBA Draft with the 43rd overall pick by the Chicago Bulls. He was traded on draft night to the Minnesota Timberwolves along with the draft rights to Norris Cole, the 28th pick, for the draft rights to Nikola Mirotić, the 23rd pick.
Lee signed a three-year guaranteed contract with the Timberwolves, rare for a second round pick. After his knee grew sore during training camp, Lee missed the beginning of the 2011–12 season after undergoing surgery to repair a torn meniscus in his left knee. On February 6, 2012, he was assigned to the Sioux Falls Skyforce in the NBA Development League to rehabilitate his knee, and he was recalled after playing three games. He was re-assigned to Sioux Falls on February 29. He made his NBA regular season debut on March 10, 2012.
In 2012–13, Lee missed the majority of training camp and the exhibition season with an injured groin. He started 12 games during the regular season, including a career-high 10 points on December 4, 2012, in a win at Philadelphia. He became slowed by injuries, missing the remainder of the season after two surgeries in January: one hip surgery and another to repair damaged cartilage in his right knee.
On June 27, 2013, the day of the 2013 NBA Draft, Lee was traded to the Golden State Warriors, who subsequently traded him to the Phoenix Suns. He spent the summer in Phoenix rehabilitating, but a less than full-strength right quadriceps prevented him from being cleared for full work. He was traded again on October 25, 2013, along with Marcin Gortat, Shannon Brown, and Kendall Marshall, to the Washington Wizards in exchange for Emeka Okafor and a 2014 lottery protected first round draft pick. Lee, Brown, and Marshall were all waived by the Wizards three days later.
On October 7, 2014, Lee signed with the Philadelphia 76ers. However, he was later waived by the 76ers on October 25, 2014. On November 3, 2014, he was acquired by the Delaware 87ers as an affiliate player. On December 5, he re-signed with the 76ers. Six days later, he was waived by the 76ers when they acquired Andrei Kirilenko and Jorge Gutiérrez in a trade. On December 13, he returned to Delaware and played that same night against the Canton Charge. On January 30, 2015, Lee was traded to the Grand Rapids Drive for the returning player rights to Khalif Wyatt.
On February 8, 2016, he signed with Brujos de Guayama of the Puerto Rican League. In 19 games, he averaged 13.4 points per game.
On September 14, 2016, he signed with Trabzonspor Basketball of the Turkish League.