Goodman was born in Chicago, the ninth of twelve children of poor Jewish immigrants from the Russian Empire, who lived in the Maxwell Street neighborhood. His father was David Goodman (1873-1926), a tailor from Warsaw; his mother was Dora Grisinsky (1873-1964) from Kaunas, Lithuania. His parents met in Baltimore, Maryland, and moved to Chicago before Benny was born.

When Benny was 10, his father enrolled him and two of his older brothers in music lessons at the Kehelah Jacob Synagogue. The next year he joined the boys club band at Jane Addams' Hull House, where he received lessons from director James Sylvester. He also received two years of instruction from the classically trained clarinetist Franz Schoepp. His early influences were New Orleans jazz clarinetists working in Chicago, notably Johnny Dodds, Leon Roppolo, and Jimmy Noone. Goodman learned quickly, becoming a strong player at an early age: he was soon playing professionally in various bands.

Goodman made his professional debut in 1921 at Central Park Theater in Chicago and entered Harrison High School in 1922. He joined the musicians’s union in 1923 and that summer he met Bix Beiderbecke. He attended Lewis Institute (now Illinois Institute of Technology) in 1924 as a high school sophomore, while also playing the clarinet in a dance hall band. (He was awarded an honorary LL.D. from IIT in 1968.) At age 14, he was in a band that featured the legendary Bix Beiderbecke. When Goodman was 16, he joined one of Chicago's top bands, the Ben Pollack Orchestra, with which he made his first recordings in 1926.

He made his first record on Vocalion under his own name two years later. Goodman recorded with the regular Pollack band and smaller groups drawn from the orchestra through 1929. The side sessions produced scores of sides recorded for the various dimestore record labels under an array of group names, including Mills' Musical Clowns, Goody's Good Timers, The Hotsy Totsy Gang, Jimmy Backen's Toe Ticklers, Dixie Daisies, and Kentucky Grasshoppers.

Goodman's father, David, was a working-class immigrant about whom Benny said (interview, Downbeat, February 8, 1956); "...Pop worked in the stockyards, shoveling lard in its unrefined state. He had those boots, and he'd come home at the end of the day exhausted, stinking to high heaven, and when he walked in it made me sick. I couldn't stand it. I couldn't stand the idea of Pop every day standing in that stuff, shoveling it around".

On December 9, 1926, David Goodman was killed in a traffic accident. Benny had recently joined the Pollack band and was urging his father to retire, since he and his brother (Harry) were now doing well as professional musicians. According to James Lincoln Collier, "Pop looked Benny in the eye and said, 'Benny, you take care of yourself, I'll take care of myself.'" Collier continues: "It was an unhappy choice. Not long afterwards, as he was stepping down from a streetcar—according to one story—he was struck by a car. He never regained consciousness and died in the hospital the next day. It was a bitter blow to the family, and it haunted Benny to the end that his father had not lived to see the success he, and some of the others, made of themselves." "Benny described his father's death as 'the saddest thing that ever happened in our family.'"

Goodman left for New York City and became a successful session musician during the late 1920s and early 1930s (mostly with Ben Pollack's band between 1926 and 1929). A notable March 21, 1928 Victor session found Goodman alongside Glenn Miller, Tommy Dorsey, and Joe Venuti in the All-Star Orchestra, directed by Nat Shilkret. He played with the nationally known bands of Ben Selvin, Red Nichols, Isham Jones (although he is not on any of Jones's records), and Ted Lewis. He recorded sides for Brunswick under the name Benny Goodman's Boys, a band that featured Glenn Miller. In 1928, Benny Goodman and Glenn Miller wrote the instrumental "Room 1411", which was released as a Brunswick 78. He also recorded musical soundtracks for movie shorts; fans believe that Benny Goodman's clarinet can be heard on the soundtrack of One A. M., a Charlie Chaplin comedy re-released to theaters in 1934.

During this period as a successful session musician, John Hammond arranged for a series of jazz sides recorded for and issued on Columbia starting in 1933 and continuing until his signing with Victor in 1935, during his success on radio. There were also a number of commercial studio sides recorded for Melotone Records between late 1930 and mid-1931 under Goodman's name. The all-star Columbia sides featured Jack Teagarden, Joe Sullivan, Dick McDonough, Arthur Schutt, Gene Krupa, Teddy Wilson, Coleman Hawkins (for 1 session), and vocalists Jack Teagarden and Mildred Bailey, and the first two recorded vocals by a young Billie Holiday.

In 1934 Goodman auditioned for NBC's Let's Dance, a well-regarded three-hour weekly radio program that featured various styles of dance music. His familiar theme song by that title was based on Invitation to the Dance by Carl Maria von Weber. Since he needed new arrangements every week for the show, his agent, John Hammond, suggested that he purchase "hot" (swing) arrangements from Fletcher Henderson, an African-American musician from Atlanta who had New York's most popular African-American band in the 1920s and early 1930s.

Goodman, a wise businessman, helped Henderson in 1929 when the stock market crashed. He purchased all of Henderson's song books, and hired Henderson's band members to teach his musicians how to play the music. In 1932, his career officially began with Fletcher Henderson. Although Henderson’s orchestra was at its climax of creativity, it had not reached any peaks of popularity. During the Depression, Fletcher disbanded his orchestra as he was in financial debt.

In early 1935, Goodman and his band were one of three bands (the others were Xavier Cugat and "Kel Murray" ) featured on Let's Dance where they played arrangements by Henderson along with hits such as "Get Happy" and "Jingle Bells" from composer and arranger Spud Murphy. Goodman's portion of the program from New York, at 12:30 a.m. Eastern Time, aired too late to attract a large East Coast audience. However, unknown to him, the time slot gave him an avid following on the West Coast (they heard him at 9:30 p.m. Pacific Time). He and his band remained on Let's Dance until May of that year when a strike by employees of the series' sponsor, Nabisco, forced the cancellation of the radio show. An engagement was booked at Manhattan's Roosevelt Grill (filling in for Guy Lombardo), but the crowd there expected 'sweet' music and Goodman's band was unsuccessful. The band set out on a tour of America in May 1935, but was still poorly received. By August 1935, Goodman found himself with a band that was nearly broke, disillusioned and ready to quit.

In July 1935, a record of the Goodman band playing the Henderson arrangements of "King Porter Stomp" backed with "Sometimes I'm Happy", Victor 78 25090, had been released to ecstatic reviews in both Down Beat and Melody Maker. Reports were that in Pittsburgh at the Stanley Theater some of the kids danced in the aisles, but in general these arrangements had made little impact on the band's tour until August 19 when they arrived in Oakland to play at McFadden's Ballroom. There, Goodman and his artists Gene Krupa, Bunny Berigan, and Helen Ward found a large crowd of young dancers, raving and cheering the hot music they had heard on the Let's Dance radio show. Herb Caen wrote that "from the first note, the place was in an uproar." One night later, at Pismo Beach, the show was another flop, and the band thought the overwhelming reception in Oakland had been a fluke.

The next night, August 21, 1935 at the Palomar Ballroom in Los Angeles, Goodman and his band began a three-week engagement. On top of the Let's Dance airplay, Al Jarvis had been playing Goodman records on KFWB radio, and Los Angeles fans were primed to hear him in person. Goodman started the evening with stock arrangements, but after an indifferent response, began the second set with the arrangements by Fletcher Henderson and Spud Murphy. According to Willard Alexander, the band's booking agent, Krupa said "If we're gonna die, Benny, let's die playing our own thing." The crowd broke into cheers and applause. News reports spread word of the enthusiastic dancing and exciting new music that was happening. Over the course of the engagement, the "Jitterbug" began to appear as a new dance craze, and radio broadcasts carried the band's performances across the nation.

The Palomar engagement was such a marked success it is often exaggeratedly described as the beginning of the swing era. Donald Clarke wrote "It is clear in retrospect that the Swing Era had been waiting to happen, but it was Goodman and his band that touched it off."

In November 1935 Goodman accepted an invitation to play in Chicago at the Joseph Urban Room at the Congress Hotel. His stay there extended to six months and his popularity was cemented by nationwide radio broadcasts over NBC affiliate stations. While in Chicago, the band recorded If I Could Be With You, Stompin' At The Savoy, and Goody, Goody. Goodman also played three special concerts produced by jazz aficionado and Chicago socialite Helen Oakley. These "Rhythm Club" concerts at the Congress Hotel included sets in which Goodman and Krupa sat in with Fletcher Henderson's band, perhaps the first racially integrated big band appearance before a paying audience in the United States. Goodman and Krupa played in a trio with Teddy Wilson on piano. Both combinations were well-received, and Wilson stayed on.

In his 1935–1936 radio broadcasts from Chicago, Goodman was introduced as the "Rajah of Rhythm." Slingerland Drum Company had been calling Krupa the "King of Swing" as part of a sales campaign, but shortly after Goodman and crew left Chicago in May 1936 to spend the summer filming The Big Broadcast of 1937 in Hollywood, the title "King of Swing" was applied to Goodman by the media. Goodman left record company RCA for Columbia, following his agent and soon to be brother-in-law John Hammond.

At the end of June 1936, Goodman went to Hollywood, where, on June 30, 1936 his band began CBS's "Camel Caravan," its third, and, according to Connor and Hicks, its greatest of them all, sponsored radio show, co-starring Goodman and his old boss Nat Shilkret. By spring, 1936, bandleader Fletcher Henderson was writing arrangements for Goodman's band. He would disband his own group in 1939 and become a full-time arranger for Goodman. Other noteworthy arrangers in the Goodman band were Jimmy Mundy, 1935 to 1939 (overlapping with Henderson) and Eddie Sauter, the 1940s. In 1940, Benny developed a serious case of sciatica, and had others compose pieces for him, such as Eddie Sauter who did not fully compose flawless compositions such as Benny Rides Again where the clarinet piece sounded like two tempo pieces instead of one. During 1945, the orchestra disbanded. After, Benny still continued to tour internationally, and played in classical concert halls with major composers such as Hindemith and Copland.

In late 1937, Goodman's publicist Wynn Nathanson attempted a publicity stunt by suggesting Goodman and his band should play Carnegie Hall in New York City. If this concert were to take place, then Benny Goodman would be the first jazz bandleader to perform at Carnegie Hall. "Benny Goodman was initially hesitant about the concert, fearing for the worst; however, when his film Hollywood Hotel opened to rave reviews and giant lines, he threw himself into the work. He gave up several dates and insisted on holding rehearsals inside Carnegie Hall to familiarize the band with the lively acoustics."

The concert was the evening of January 16, 1938. It sold out weeks before, with the capacity 2,760 seats going for the top price of US$2.75 a seat, for the time a very high price. The concert began with three contemporary numbers from the Goodman band—"Don't Be That Way," "Sometimes I'm Happy," and "One O'Clock Jump." They then played a history of jazz, starting with a Dixieland quartet performing "Sensation Rag", originally recorded by the Original Dixieland Jazz Band in 1918. Once again, initial crowd reaction, though polite, was tepid. Then came a jam session on "Honeysuckle Rose" featuring members of the Count Basie and Duke Ellington bands as guests. (The surprise of the session: Goodman handing a solo to Basie's guitarist Freddie Green who was never a featured soloist but earned his reputation as the best rhythm guitarist in the genre—he responded with a striking round of chord improvisations.) As the concert went on, things livened up. The Goodman band and quartet took over the stage and performed the numbers that had already made them famous. Some later trio and quartet numbers were well-received, and a vocal on "Loch Lomond" by Martha Tilton provoked five curtain calls and cries for an encore. The encore forced Goodman to make his only audience announcement for the night, stating that they had no encore prepared but that Martha would return shortly with another number.

By the time the band got to the climactic piece "Sing, Sing, Sing", success was assured. This performance featured playing by tenor saxophonist Babe Russin, trumpeter Harry James, and Benny Goodman, backed by drummer Gene Krupa. When Goodman finished his solo, he unexpectedly gave a solo to pianist Jess Stacy. "At the Carnegie Hall concert, after the usual theatrics, Jess Stacy was allowed to solo and, given the venue, what followed was appropriate," wrote David Rickert. "Used to just playing rhythm on the tune, he was unprepared for a turn in the spotlight, but what came out of his fingers was a graceful, impressionistic marvel with classical flourishes, yet still managed to swing. It was the best thing he ever did, and it's ironic that such a layered, nuanced performance came at the end of such a chaotic, bombastic tune."

This concert has been regarded as one of the most significant in jazz history. After years of work by musicians from all over the country, jazz had finally been accepted by mainstream audiences. Recordings were made of this concert, but even by the technology of the day the equipment used was not of the finest quality. Acetate recordings of the concert were made, and aluminum studio masters were also cut.

Goodman took the newly discovered recording to his record company, Columbia, and a selection was issued on LP. These recordings have not been out of print since they were first issued. In early 1998, the aluminum masters were rediscovered and a new CD set of the concert was released based on these masters. The album released based on those masters went on to be one of the best selling live jazz albums of all time.

Pianist/arranger Mary Lou Williams was a good friend of both Columbia records producer John Hammond and Benny Goodman. She first suggested to John Hammond that he see Charlie Christian.

Charlie Christian's recordings and rehearsal dubs made with Benny Goodman in the early forties are widely known and were released by Columbia.

Goodman continued his meteoric rise throughout the late 1930s with his big band, his trio and quartet, and a sextet. By the mid-1940s, however, big bands lost a lot of their popularity. In 1941, ASCAP had a licensing war with music publishers. In 1942 to 1944 and 1948, the musician's union went on strike against the major record labels in the United States, and singers took the spot in popularity that the big bands had once enjoyed. During this strike, the United States War Department approached the union and requested the production of the V-Disc, a set of records containing new and fresh music for soldiers to listen to. Also, by the late 1940s, swing was no longer the dominant mode of jazz musicians.

By the 1940s, jazz musicians were borrowing advanced ideas from classical music. The recordings Goodman made in bop style for Capitol Records were highly praised by jazz critics. When Goodman was starting a bebop band, he hired Buddy Greco, Zoot Sims, Wardell Gray and a few other modern players.

Goodman enjoyed the bebop and cool jazz that was beginning to arrive in the 1940s. When Goodman heard Thelonious Monk, a celebrated pianist and accompanist to bop players Charlie Parker, Dizzy Gillespie and Kenny Clarke, he remarked, "I like it, I like that very much. I like the piece and I like the way he played it. I think he's got a sense of humor and he's got some good things there."

By 1953, Goodman completely changed his mind about bebop. "Maybe bop has done more to set music back for years than anything Basically it's all wrong. It's not even knowing the scales. Bop was mostly publicity and people figuring angles."

Goodman's first classical recording dates from April 25, 1938 when he recorded Mozart's Clarinet Quintet in A major, K. 581, with the Budapest Quartet. After his bop period, Goodman furthered his interest in classical music written for the clarinet, and frequently met with top classical clarinetists of the day. In 1946, he met Ingolf Dahl, an emigre classical composer on the faculty of the University of Southern California, who was then musical director of the Victor Borge show. They played chamber music together (Brahms, Milhaud, Hindemith, Debussy) and in 1948 Goodman played in the world premiere performance of Dahl's Concerto a Tre.

Clarinetists all over the world are indebted to Goodman for his being singly responsible for having commissioned many major works of twentieth century chamber music for clarinet and small ensembles as well as compositions for clarinet and symphony orchestra that are now standard repertoire in the field of classical performance. He also gave premiere performances of other works written by leading composers in addition to the pieces he commissioned, namely Contrasts by Béla Bartók, Clarinet Concerto No. 2, Op. 115 by Malcolm Arnold, Derivations for Clarinet and Band by Morton Gould, and Aaron Copland's Clarinet Concerto. While Leonard Bernstein's Prelude, Fugue, and Riffs was commissioned for Woody Herman's big band, it was premiered by Goodman. Woody Herman was the dedicatee (1945) and first performer (1946) of Igor Stravinsky's Ebony Concerto, but many years later Stravinsky made another recording, this time with Benny Goodman as the soloist.

He made a further recording of Mozart's Clarinet Quintet, in July 1956 with the Boston Symphony String Quartet, at the Berkshire Festival; on the same occasion he also recorded Mozart's Clarinet Concerto in A major, K. 622, with the Boston Symphony Orchestra under Charles Munch. He also recorded the clarinet concertos of Weber and Carl Nielsen.

Other recordings of classical repertoire by Goodman are:

After forays outside of swing, Goodman started a new band in 1953. According to Donald Clarke, this was not a happy time for Goodman.

Benny Goodman's band appeared as a specialty act in major musical features, including The Big Broadcast of 1937, Hollywood Hotel (1938), Syncopation (1942), The Powers Girl (1942), Stage Door Canteen (1943), The Gang's All Here (1943), Sweet and Lowdown (1944) and A Song Is Born (1948). Goodman's only starring feature was Sweet and Low-Down (1944).

Goodman's success story was told in the 1955 motion picture The Benny Goodman Story with Steve Allen and Donna Reed. A Universal-International production, it was a follow up to 1954's successful The Glenn Miller Story. The screenplay was heavily fictionalized, but the music was the real draw. Many of Goodman's professional colleagues appear in the film, including Ben Pollack, Gene Krupa, Lionel Hampton and Harry James.

Goodman was regarded by some as a demanding taskmaster, by others an arrogant and eccentric martinet. Many musicians spoke of "The Ray", Goodman's trademark glare that he bestowed on a musician who failed to perform to his demanding standards. Guitarist Allan Reuss incurred the maestro's displeasure on one occasion, and Goodman relegated him to the rear of the bandstand, where his contribution would be totally drowned out by the other musicians. Vocalists Anita O'Day and Helen Forrest spoke bitterly of their experiences singing with Goodman. "The twenty or so months I spent with Benny felt like twenty years," said Forrest. "When I look back, they seem like a life sentence." At the same time, there are reports that he privately funded several college educations and was sometimes very generous, though always secretly. When a friend once asked him why, he reportedly said, "Well, if they knew about it, everyone would come to me with their hand out."

Goodman is also responsible for a significant step in racial integration in America. In the early 1930s, black and white jazz musicians could not play together in most clubs or concerts. In the Southern states, racial segregation was enforced by the Jim Crow laws. Benny Goodman broke with tradition by hiring Teddy Wilson to play with him and drummer Gene Krupa in the Benny Goodman Trio. In 1936, he added Lionel Hampton on vibes to form the Benny Goodman Quartet; in 1939 he added pioneering jazz guitarist Charlie Christian to his band and small ensembles, who played with him until his death from tuberculosis less than three years later. This integration in music happened ten years before Jackie Robinson became the first black American to enter Major League Baseball. " popularity was such that he could remain financially viable without touring the South, where he would have been subject to arrest for violating Jim Crow laws." According to Jazz by Ken Burns, when someone asked him why he "played with that nigger" (referring to Teddy Wilson), Goodman replied, "I'll knock you out if you use that word around me again".

One of Benny Goodman's closest friends off and on, from the 1930s onward was celebrated Columbia records producer John H. Hammond, who influenced Goodman's move from RCA to the newly created Columbia records in 1939.

Benny Goodman married Hammond's sister Alice Frances Hammond (1913–1978) on March 14, 1942. They had two daughters, Benjie and Rachel. Alice was previously married to British politician Arthur Duckworth, from whom she obtained a divorce.

Both daughters studied music, though neither was as successful as her father.

Hammond had encouraged Goodman to integrate his band, persuading him to employ pianist Teddy Wilson. But Hammond's tendency to interfere in the musical affairs of Goodman's and other bands led to Goodman pulling away from him. In 1953 they had another falling-out during Goodman's ill-fated tour with Louis Armstrong, which was produced by John Hammond.

Goodman appeared on a 1975 PBS salute to Hammond but remained at a distance. In the 1980s, following the death of Alice Goodman, John Hammond and Benny Goodman, both by then elderly, reconciled. On June 25, 1985, Goodman appeared at Avery Fisher Hall in New York City for "A Tribute to John Hammond".

After winning numerous polls over the years as best jazz clarinetist, Goodman was inducted into the Down Beat Jazz Hall of Fame in 1957.

Goodman continued to play on records and in small groups. One exception to this pattern was a collaboration with George Benson in the 1970s. The two met when they taped a PBS salute to John Hammond and re-created some of the famous Goodman-Charlie Christian duets.

Benson later appeared on several tracks of a Goodman album released as "Seven Come Eleven." In general Goodman continued to play in the swing style he was most known for. He did, however, practice and perform classical clarinet pieces and commissioned compositions for clarinet. Periodically he would organize a new band and play a jazz festival or go on an international tour.

Despite increasing health problems, he continued to play until his death from a heart attack in New York City in 1986 at the age of 77, in his home at Manhattan House, 200 East 66th Street. A longtime resident of Stamford, Connecticut, Benny Goodman is interred in the Long Ridge Cemetery in Stamford. The same year, Goodman was honored with the Grammy Lifetime Achievement Award. Benny Goodman's musical papers were donated to Yale University after his death.

Goodman received honorary doctorates from Union College, University of Illinois, Southern Illinois University Edwardsville, Bard College, Columbia University, Yale University, and Harvard University.

He is a member of the National Association of Broadcasters Hall of Fame in the radio division.

His music was featured in the 2010 documentary Jews and Baseball: An American Love Story, narrated by Academy Award winner Dustin Hoffman.

(This discography combines LP and CD reissues of Goodman recordings under the dates of the original 78 rpm recordings through about 1950)