Riley was a versatile athlete in college, participating in both basketball and football. He led the 1966 University of Kentucky basketball team, coached by the legendary Adolph Rupp, to the NCAA title game, where they lost to Texas Western (now known as UTEP). He was selected by the San Diego Rockets in the 1st round of the 1967 NBA Draft, and was also drafted as a flanker by the Dallas Cowboys in the 11th round of the 1967 NFL draft. He decided to join the Rockets, but was unimpressive as a player. Riley later signed with the Los Angeles Lakers, helping them win the 1972 NBA Finals. After a relatively obscure playing career, he retired as a player in 1976.

Riley returned to the NBA in 1977 as a broadcaster for the Lakers, and then became one of the team's assistant coaches during the 1979-80 season. He became head coach during the 1981-82 season, and led the Lakers to victory against the Philadelphia 76ers for the championship that year. Both teams returned to the NBA Finals in 1983, but Riley's Lakers were swept by the 76ers. The Lakers lost in the Finals again in 1984, losing to the Boston Celtics in seven games. In 1985, however, Riley earned his second NBA title as a coach, when the Lakers beat the Celtics in six games. However, the Lakers were defeated in the Western Conference Finals by the Houston Rockets in 1986.

Riley redeemed himself in 1987, with a Lakers team that is considered one of the greatest teams of all time. With future Hall-of-Famers Magic Johnson, James Worthy and Kareem Abdul Jabbar, plus important role players such as Michael Cooper and Byron Scott, the Lakers finished 65-17 in the regular season, third-best in team history. They met with simliar success in the playoffs, dispatching the Celtics in six games to win the NBA title.

One of Riley's most famous moments came when he promised the crowd a repeat championship during the Lakers' championship parade in downtown Los Angeles. While the 1988 Lakers did not produce as many wins in the regular season as the 1987 Lakers, they were just as successful in the playoffs, becoming the first team in 20 years to repeat as champions. The Lakers beat the Detroit Pistons in seven games in the 1988 NBA Finals, making good on Riley's promise.

Although Riley would offer no further guarantees, his Lakers embarked upon a quest to obtain a third consecutive championship in 1989. Having successfully claimed a repeat championship the year before, the term coined for this new goal was a "three-peat" championship, and indeed Riley, through his corporate entity, Riles & Co., actually trademarked the phrase "three-peat". But ultimately, the Lakers, plagued by injuries, were swept by the Pistons in the 1989 NBA Finals.

Riley stepped down as coach of the Lakers after they lost to the Phoenix Suns in the 1990 NBA playoffs, amid rumors of player mistreatment and anger problems on his part. In spite of these rumors and his resignation, he was named NBA Coach of the Year for the first time.

After stepping down as coach, Riley accepted a job as a television commentator for NBC after leaving the Lakers. However, this job only lasted one year, as he became head coach of the New York Knicks in 1991. In 1993, he led the Knicks to their best regular season record in team history and received his second Coach of the Year award. Riley returned to the NBA Finals in 1994, but his Knicks lost in seven games to the Rockets. In 1995, Riley resigned, and became head coach and general manager of the Miami Heat. In 1997, Riley was selected as Coach of the Year for the third time, after leading the Heat to a 61-21 regular season record, 1st in the Atlantic division.

After finishing a respectable 50-32 in 2001, the Heat lost two of their best players when guard Tim Hardaway was traded to the Dallas Mavericks and Anthony Mason signed with the Milwaukee Bucks. In part because of these departures, the Heat finished a disappointing 36-46 in 2002. Riley was so disgusted with the Heat's performance that he declared he was about to "fire himself." Before the beginning of the 2003-2004 season, he did step down as Heat coach, to fully dedicate his attention to his duties as general manager. One of his biggest moves as full-time general manager was to trade Caron Butler, Brian Grant, Lamar Odom and a first-round draft pick to the Lakers for superstar Shaquille O'Neal.

Riley resumed coaching the Heat on December 12, 2005, replacing Stan Van Gundy after the Heat started the season with a disappointing 11-10 record. Van Gundy had resigned in order to "spend more time with my family." The move came as a shock to the basketball community, with some speculating that with Shaquille O'Neal coming back from injury, Dwyane Wade having his best season yet, and an All-Star roster including Gary Payton and Antoine Walker, Riley wanted to try to regain his former glory by coaching Miami to its first NBA Championship. However, he will probably have to face his old nemesis, the Detroit Pistons in the Eastern Conference playoffs.

Outside of basketball, Riley has developed into a pop-culture figure. This is born out of Riley's signature look, a slicked-back hairstyle, which is often described as gangster-looking. He came to the public eye leading the "Showtime" Lakers of the 1980s, furthering his image by "guaranteeing" a championship. It should also be noted that Riley has coached in three American cities well known for popular nightlife and celebrity culture. Riley is also known for his friendship with Giorgio Armani, preferring to wear Armani suits during basketball games, and even modeling once at an Armani show.

Riley's suave nature and lifestyle has set him apart from other head coaches in the NBA. During his first stint with the Heat, Riley slipped on his yacht and suffered a cut on his forehead that requried stitches.

Riley is the second all-time winningest NBA coach, behind Lenny Wilkens.

Riley has two children, James Riley and Elisabeth Riley.