He was born to a Lithuanian-Jewish family in Toronto; Cronenberg's father was a journalist and his mother a pianist. He went to Harbord Collegiate Institute when he was young and later graduated from the University of Toronto with a degree in literature, having switched from science. He has cited William S. Burroughs and Vladimir Nabokov as influences.

After two short sketch films and two short art-house features (the black and white Stereo and the colour Crimes of the Future) Cronenberg went into partnership with Ivan Reitman. The Canadian government provided finance for Cronenberg's films through the 1970s. Cronenberg alternated his signature "body horror" films such as Shivers with projects reflecting his interest in car racing and bike gangs. Rabid exploited the unexpected acting talents of porn queen Marilyn Chambers (Cronenberg's first choice was a young unknown called Sissy Spacek). Rabid was a breakthrough with international distributors and his next two horror features gained stronger support.

Over the arc of his career, Cronenberg's films follow a definite progression, a movement from the social world to the inner life. In his early films, scientists modify human bodies, which results in social anarchy (e.g. Shivers, Rabid). In his middle period, the chaos wrought by the scientist is more personal, (e.g. The Brood, Scanners, Videodrome). In the later period, the scientist himself is altered by his experiment (e.g. Cronenberg's remake of The Fly). This trajectory culminates in Dead Ringers - arguably his greatest achievement - in which a twin pair of gynecologists spiral into codependency and drug addiction. Cronenberg's later films tend more to the psychological, often contrasting subjective and objective realities (eXistenZ, M. Butterfly, Spider).

Cronenberg has said that his films should be seen "from the point of view of the disease", and that, for example, he identifies with the characters in Shivers after they become infected with the anarchic parasites. This perspective is illustrated in The Fly when the hero discovers that he has been genetically fused with an insect. Rather than saying "My teleport machine went wrong", he says "My teleport machine turned into a gene-splicer". Disease and disaster, in Cronenberg's work, are less problems to be overcome than agents of personal transformation. Similarly, in Crash (1996), people who have been injured in car crashes attempt to view their ordeal as "a fertilising rather than a destructive event". In 2006, Cronenberg would say that he was upset that Paul Haggis had chosen the same name for his Academy Award winning film Crash, feeling it was not only ethically wrong, but annoying as well.

Aside from The Dead Zone (1983) and The Fly, Cronenberg has not generally worked within the world of big-budget, mainstream Hollywood filmmaking, although he has had occasional near misses. At one stage he was considered by George Lucas as a possible director for Return of the Jedi but was passed. Cronenberg also worked for nearly a year on a version of Total Recall but experienced "creative differences" with producers Dino de Laurentiis and Ronald Shusett. A different version of the film was eventually made by Paul Verhoeven. In the late 1990s Cronenberg was announced as director of a sequel to another Verhoeven film, Basic Instinct, but this also fell through. His most recent work, the thriller A History of Violence (2005), is one of his highest budgeted and most mass audience-accessible to date. He has said that the decision to direct it was influenced by his having had to defer some of his salary on the low-budgeted Spider, but it is one of his most critically acclaimed films to date.

Cronenberg has hired Howard Shore to compose the soundtrack to nearly all of his films (see List of noted film director and composer collaborations). Other regular collaborators include actor Robert Silverman, art director Carol Spier, sound editor Bryan Day, film editor Ronald Sanders, his sister, costume designer Denise Cronenberg, and, from 1979 until 1988, cinematographer Mark Irwin.

Since 1988's Dead Ringers, Cronenberg has worked with cinematographer Peter Suschitzky on each of his films. Suschitzky was the director of photography for Star Wars Episode V: The Empire Strikes Back, and Cronenberg has repeatedly said that Suschitzky's work in that film made it the most beautiful sci-fi film he'd ever seen, which was a motivating factor to work with him on Dead Ringers.

Coupled with the loyalty he shows to his key personnel, Cronenberg remains a staunchly Canadian filmmaker, with nearly all of his films--including major studio vehicles The Dead Zone and The Fly--having been filmed in his home province of Ontario (notable exceptions include M. Butterfly and Spider, most of which were shot in China and England, respectively. Also, Rabid and Shivers were shot in and around the city of Montreal). Most of his films have been at least partially financed by Telefilm Canada, and Cronenberg is a vocal supporter of government-backed film projects, saying "Every country needs in order to have a national cinema in the face of Hollywood."

Cronenberg has also appeared in the films of other directors as an actor. Most of his roles are cameo appearances, as in Into The Night, To Die For, and Alias, but on occasion he has played major roles, as in Nightbreed or Last Night. He has not played major roles in any of his own films, but he did put in a brief appearance as a gynaecologist in The Fly; he can also be glimpsed among the sex-crazed hordes in Shivers; he can be heard as an unseen car-pound attendant in Crash; and his hands can be glimpsed in eXistenZ.