Henry Warren Beaty was born in Richmond, Virgina. His mother, Kathlyn Corinne, who was Canadian, was a teacher from Nova Scotia, and his father, Ira Owens Beaty, had a Ph.D. in educational psychology, was a public school administrator, and dealt in real estate.
 Beatty's grandparents were also educators.

Beatty started his career making appearances on television shows such as Studio One (1957), Kraft Television Theatre (1957), and Playhouse 90 (1959). He was a semi-regular on The Many Loves of Dobie Gillis during its first season (1959–60). His performance in William Inge's A Loss of Roses on Broadway garnered him a 1960 Tony Award nomination for Best Featured Actor in a Play and a 1960 Theatre World Award. It was his sole appearance on Broadway.

. Beatty produced, co-wrote and acted in Shampoo (1975), directed by Hal Ashby, which was nominated for four Academy Awards, including Best Original Screenplay, as well as five Golden Globe Awards, including Best Motion Picture and Best Actor. 

In 1978, Beatty directed, produced, wrote and acted in Heaven Can Wait (1978) (sharing co-directing credit with Buck Henry). The film was nominated for nine Academy Awards, including Best Picture, Director, Actor, and Adapted Screenplay.
It also won three Golden Globe Awards, including Best Motion Picture and Best Actor.Beatty's next film was Reds (1981), a historical epic about American Communist journalist John Reed who observed the Russian October Revolution – a project Beatty had begun researching and filming for as far back as 1970.

Following Reds, Beatty did not appear in a film for five years until 1987's Ishtar, written and directed by Elaine May. Following severe criticism in press reviews by the new British studio chief David Puttnam just prior to its release, the film received mixed reviews and was a box-office bomb grossing only $14 million against a $55 million budget. Puttnam attacked several other over-budget U.S. films greenlit by his predecessor and was fired shortly thereafter.

Beatty next produced, directed and played the title role as comic strip based detective Dick Tracy in the 1990 film of the same name. The film received critical acclaim and was one of the highest-grossing films of the year. It received seven Academy Award nominations, winning three for Best Art Direction, Best Makeup, and Best Original Song. It also received four Golden Globe Award nominations, including Best Motion Picture.

Beatty has been married to actress Annette Bening since 1992. They have four children: Stephen Ira (born January 8, 1992), Benjamin (born August 23, 1994), Isabel (born January 11, 1997), and Ella (born April 8, 2000). His eldest son Stephen Ira came out as transgender in 2006.

Prior to marrying Bening, Beatty was well known for his high-profile romantic relationships that received generous media coverage. Singer-songwriter Carly Simon also dated Beatty and confirmed in November 2015 that she wrote a verse in her hit song "You're So Vain" about him.

Beatty is a longtime supporter of the Democratic Party. In 1972, Beatty was part of the "inner circle" of Senator George McGovern's presidential campaign. He traveled extensively and was instrumental in organizing fundraising.