Caruso was born in the New York City neighborhood of Forest Hills, Queens. The child of an Italian American father and an Irish American mother, he attended the same Roman Catholic parochial school as Ray Romano and Pia Zadora: Our Lady Queen of Martyrs in Forest Hills, New York for elementary and middle school; he later attended Archbishop Molloy High School in nearby Briarwood.

One of his first film roles was in 1982's An Officer and a Gentleman, to be followed by a decade in supporting parts. One of these was the television series Crime Story which ran from 1986-88 in which he played Johnny O'Donnell. His breakthrough role came in 1993 as Detective John Kelly as part of the original lineup of NYPD Blue. Caruso infamously left the show the following year to pursue a film career that failed to materialize.

In 1997, Caruso returned to television as the star of the CBS drama series Michael Hayes. It ran for one season of 22 episodes.

In 2000, Caruso had a supporting role in Proof of Life. In 2001 he played a lead role in the horror film Session 9 and since 2002, has starred as Horatio H. Caine in the highly-rated CSI spin-off CSI: Miami.

Aside from his acting career, Caruso is a co-owner of Steam, a clothing and furniture store in Miami, Florida. He has a daughter, Greta (born June 1, 1984) with his second wife, Rachel Ticotin, and a son, Marquez Anthony (born September 15, 2005) with his girlfriend, Liza Marquez.