As the son of Malcolm Kerr, an American academic who specialised in the Middle East, Kerr spent much of his childhood in Lebanon and other Arab states. He attended Palisades High School (now Palisades Charter High School) in Pacific Palisades, California. On January 18, 1984, Kerr saw his life drastically change when his father, who was then serving as president of the American University of Beirut, was murdered by Islamic militants in Lebanon.

Kerr was about to start playing basketball on the Arizona basketball program. His college career there started in November, two months after his father's death. In the summer of 1986, Kerr was named to the USA Basketball team that competed in the FIBA World Championship in Spain. The team became the last American Men's Senior Team comprised strictly from amateur players to capture a gold medal. Unfortunately, Kerr injured his knee during the tournament, forcing him to miss an entire season at Arizona. After returning to the team, Kerr helped the Wildcats reach the Final Four of the NCAA Division I basketball tournament in 1988.

Kerr was selected by the Phoenix Suns in the 1988 NBA Draft, but then he was traded to the Cleveland Cavaliers in 1989. He spent over three seasons there, and then part of a season with the Orlando Magic. In 1993, he signed with the Chicago Bulls. In seasons 1993-1994 and 1994-1995 the Bulls reached the playoffs, but, without Michael Jordan's presence for all of 1994 and much of 1995, they could not win championships. However, with Jordan back full time for the 1995-1996 season, the Bulls went 72-10 and defeated the Seattle SuperSonics for the NBA championship, allowing Kerr to be a part of a team that set a record for the most wins in a season, and to start his run of four NBA championships in a row.

Kerr made the game-winning shot in Game Six of the 1997 NBA Finals against the Utah Jazz that gave the Bulls back-to-back championships. The Bulls again triumped over the Jazz in the 1998 Finals, after which Kerr was traded to the San Antonio Spurs.

The Spurs made it to the finals for the first time in their history, and Kerr won his fourth ring in a row when the Spurs beat the New York Knicks for the 1999 NBA championship.

In the 2003 Playoffs, Kerr made key contributions in Game Six of the Spurs' Western Conference Finals series against the Dallas Mavericks, including four clutch three-pointers that helped eliminate the Mavericks. The Spurs eventually won the NBA championship that year by beating the New Jersey Nets in the NBA Finals, led by Kerr, David Robinson, Tim Duncan and Emanuel Ginobili, among others.

Kerr ended his career as a dependable bench player who was capable of making jump shots and three-pointers during the game's most critical moments. He remained a key substitute for the Spurs until 2003.

Kerr announced his retirement after the 2003 NBA Finals. He was then hired as an NBA analyst by TNT, and also contributes to Yahoo! as an NBA commentator. He often works games on TNT with the legendary Marv Albert, he currently has a special, unsponsored segment of Steve Wonders? in which he goes over interesting facts in NBA history.

His career totals are: 5,437 points for six points per game, 1,060 rebounds for a total of 1.2 rebounds per game, and 1,658 assists for an average of 1.8 assists per game. He also retired as the league's all-time leader in three-point shooting percentage for a season (.524 in 1994-95) and a career (.454).

On April 15, 2004, Kerr was announced as a member of a potential group of buyers that would acquire his old team, the Suns, from Jerry Colangelo for $300 million.