Ebb was born in Manhattan to a Jewish family, the son of Anna Evelyn ( Gritz) and Harry Ebb. He worked during the early 1950s bronzing baby shoes, as a trucker's assistant, and was also employed in a department store credit office and at a hosiery company. In 1955, he graduated from New York University with a bachelor’s degree in English Literature, and two years later, he earned his Master’s from Columbia University. One of his early collaborators was Phil Springer, and a song they wrote together (“I Never Loved Him Anyhow”) was recorded by Carmen McRae in 1956. Another song Ebb wrote with Springer was “Heartbroken” (1953), which was recorded by Judy Garland, the mother of his future protégée, Liza Minnelli. Other Springer-Ebb tunes include "How Little We Know," "Moonlight Gambler" and "Nevertheless I Never Lost the Blues". "Don't Forget", which he wrote with Norman Leyden, was recorded by singer Eddy Arnold in 1954.

On his first theatrical writing job, he co-wrote the lyrics for the musical revue Baker's Dozen in 1951. He did songs with Norman Martin for the revue Put It in Writing (1962). He also worked with composer Paul Klein from the early 1950s onward, contributing songs to the cabaret revue Isn't America Fun (1959) and the Broadway revue From A to Z (1960), directed by Christopher Hewett. With Klein, Ebb wrote his first book musical, Morning Sun. Originally, Bob Fosse was attached as director. Fosse eventually withdrew from the project, and the show was unsuccessful.

Music publisher Tommy Valando introduced Ebb to Kander in 1962. After a few songs such as "My Coloring Book," Kander and Ebb wrote a stage musical, Golden Gate, that was never produced. However, the quality of the score convinced producer Harold Prince to hire them for their first professional production, the George Abbott-directed musical Flora the Red Menace, based on Lester Atwell's novel Love is Just Around the Corner. Although it won star Liza Minnelli a Tony Award, the show closed quickly.

Their second collaboration, Cabaret, was considerably more successful, running for nearly three years. Directed by Prince and based on the John Van Druten play I Am a Camera (which, in turn, was based on the writing of Christopher Isherwood), the musical starred Jill Haworth as Sally Bowles, Lotte Lenya as Fraulein Schneider and Joel Grey as the emcee. It won eight of the 11 Tony Awards for which it was nominated, including Best Musical and Best Score. Adapted into a film by Bob Fosse, it won numerous Academy Awards, though not Best Picture. It was revived twice, first in 1987 with Grey reprising his role and again in 1998 in a long-running revival, originally starring Alan Cumming as the emcee and Natasha Richardson as Sally Bowles.

Their next few works were less successful: The Happy Time, directed by Gower Champion and starring Robert Goulet, ran for less than a year. Zorba, directed by Prince, also ran less than a year, though it was more successful in its 1983 revival; and 70, Girls, 70, which was originally intended as an off-Broadway production, closed after 35 performances.

In 1972, he wrote the television special, Liza with a Z. In 1974, Kander, Ebb and Fosse, contributed to Liza , a concert for Minnelli on Broadway. In 1975, the team wrote the score to Funny Lady, the sequel to Funny Girl. Chicago (1975) had mixed reviews but ran for more than two years. Starring Chita Rivera, Jerry Orbach and Gwen Verdon in her last Broadway role, it suffered from a cynical attitude, which contrasted with the record-breaking popularity of A Chorus Line. Though rumors of a film production directed again by Fosse were heard, the show did not seriously re-surface until 1996, when it was revived as part of the Encores! series. A huge hit, the minimalist production transferred to Broadway and is still running after more than 4,000 performances. A film version was eventually produced (in 2002) and won Best Picture at the Academy Awards.

Ebb himself wrote the book for Shirley MacLaine’s Broadway solo revue in 1976. The following year, Kander and Ebb worked with Minnelli and Martin Scorsese twice: first, in the film New York, New York, which had them write what is perhaps their best-known song, the title track; and, again in The Act, a musical about a fictional nightclub act. It ran for under ten months. After contributing a song to Phyllis Newman’s one-woman musical, The Madwoman of Central Park West, the team wrote Woman of the Year, which starred Lauren Bacall and won the team their second Tony Award for Best Score.

The Rink (1984) teamed Kander and Ebb again with Minnelli and Rivera. The cast also included Jason Alexander and Rob Marshall. Following the closure of the show after six months, Kander and Ebb would not produce new material, save for a song in Hay Fever in 1985, for nine years. In 1991, the revue And The World Goes 'Round opened off-Broadway, which brought Karen Ziemba, Susan Stroman and Scott Ellis to the attention of the theatre community. The team’s musical adaptation of Kiss of the Spider Woman opened in 1993, starring Chita Rivera. Reunited with director Harold Prince, the show ran for more than two years and won them their third and last Tony Award for best score.

The team’s last original work to reach Broadway during Ebb's life opened in 1997. Steel Pier brought together Ziemba, Ellis and Stroman and though the show was nominated for 11 Tonys, it won none and closed after two months. It also featured Kristin Chenoweth. In 1997, Ebb reworked lyrics to Richard Rodgers' melody for the television production of Cinderella. Two decades earlier, Ebb refused the opportunity to write the musical Rex with Rodgers.

The team also had two works produced outside New York. Over & Over, an adaptation of the Thornton Wilder play The Skin of Our Teeth, was performed at the Signature Theatre in Arlington, Virginia in 1999 and has been revamped for a 2007 staging by the Westport Country Playhouse under the title All of Us. The Visit, starring Chita Rivera and John McMartin , was presented by the Goodman Theatre in Chicago.

Ebb died at 76 of a heart attack at his home in New York City.

At the time of his death, Ebb was working on a new musical with Kander, Curtains: A Backstage Murder Mystery Musical Comedy. The project had already lost its book writer, Peter Stone, who died in 2003. The show's orchestrator, Michael Gibson, also died while the project was underway. Coincidentally, the show is about a series of deaths during the production of a Broadway musical. Kander continued working on the project with a new librettist Rupert Holmes, writing new lyrics when necessary. The musical had its world premiere at the Ahmanson Theater in Los Angeles in July 2006, and ran on Broadway at the Al Hirschfeld Theatre from March 2007 through June 2008.

At its 2007 ceremony, the Drama Desk honored Kander and (the late) Ebb with a special award for "42 years of excellence in advancing the art of the musical theater."