Handey was born in San Antonio, Texas, in 1949. His family later moved to El Paso, Texas, where Handey attended Eastwood High School (where he was editor of Sabre,the school newspaper) and the University of Texas at El Paso.

Handey's earliest writing job was for a newspaper, the San Antonio Express-News. He lost the job, in his words, after writing "an article that offended local car dealerships". His first comic writing was with comedian Steve Martin. According to Martin, Handey got a job writing for Saturday Night Live in 1975 after Martin introduced Handey to the show's creator, Lorne Michaels.For several years Handey worked on other television projects: the Canadian sketch series Bizarre in 1980; the 1980 TV special Comedy Is Not Pretty; and Lorne Michaels' short-lived sketch show on NBC called The New Show in 1984. Handey returned to Saturday Night Live in 1985 as a writer and co-producer.

In April 1984, National Lampoon published the first of Jack Handey's Deep Thoughts. Additional Deep Thoughts appeared in the October and November 1984 editions as well as in the short-lived comedy magazine Army Man, while more appeared in 1988 in The New Mexican. The one-liners were to become Handey's signature work, notable for their concise humor and their outlandish hypothetical situations. For example:

• If trees could scream, would we be so cavalier about cutting them down? We might, if they screamed all the time, for no good reason.

• The crows seemed to be calling his name, thought Caw.