A lifelong resident of Chackbay, Louisiana, a small town just outside Thibodaux, Tauzin graduated from Nicholls State University in 1964 and earned a law degree from Louisiana State University in 1967. While attending law school, he served as a legislative aide in the Louisiana state senate.

Tauzin began his elective career in 1972, when he was elected to the Louisiana House of Representatives and served four full terms as a Democrat. In 1979, 3rd District Congressman Dave Treen, Louisiana's first Republican congressman since Reconstruction, was elected the state's first Republican governor since that time. He resigned his House seat on March 10, 1980. Tauzin entered a special election for the seat on May 22, just five months after winning a fifth term in the state house, and won by seven points, taking office that night. He won a full term in November with 85 percent of the vote.

For 15 years, Tauzin was one of the more conservative Democrats in the House. Even though he evenually rose to become an assistant majority whip, he felt shut out by some of his more liberal colleagues. When the Democrats lost control of the House after the 1994 elections, Tauzin was one of the cofounders of the House Blue Dog Coalition, a group of moderate-to-conservative Democrats. However, on August 8, 1995 Tauzin himself became a Republican, claiming that conservatives were no longer welcome in the Democratic Party. He soon became a majority whip, becoming the only congressman ever to serve in that position for both parties. Regardless of party, Tauzin remained very popular at home. He was reelected 12 more times, all without major-party opposition; the first ten of those completely unopposed.

Tauzin served as chairman of the Energy and Commerce Committee from 2001 until February 4, 2004 when he announced he wouldn't run for a 13th full term. Tauzin, who has 5 children by his first marriage, heavily backed his son Billy Tauzin III as his replacement, even going so far as to appear in ads which were criticized as blurring the lines on which man was actually running for Congress. In spite of his father's support, Billy III was defeated.

On January 3, 2005, the same day he left Congress, Tauzin began work as the head of the Pharmaceutical Research and Manufacturers of America, or PhRMA, a powerful trade group for pharmaceutical companies. It was reported that they had offered more than a million dollars per year for his services, outbidding the MPAA (L.A. Times, 9 Feb. 2004). Two months earlier, Tauzin had played a key role in shepherding the Medicare Prescription Drug Bill through Congress, which had been criticized by opponents for being too generous to the pharmaceutical industry.