Spolsky grew up in Albuquerque, New Mexico and lived there until he was 15. He then moved with his family to Jerusalem, Israel, where he attended high school and did his military service as a paratrooper. He was one of the founders of Kibbutz Hanaton in Upper Galilee. In 1987, he returned to the United States to attend college. He studied at the University of Pennsylvania for a year before transferring to Pierson College, Yale University, where he graduated in 1991 with a BS summa cum laude in Computer Science.

Spolsky started working at Microsoft in 1991 as a Program Manager on the Microsoft Excel team, where he designed Excel Basic and drove Microsoft's Visual Basic for Applications strategy. He moved to New York City in 1995 where he worked for Viacom and Juno. In 2000, he founded Fog Creek Software and created the Joel on Software weblog which he discontinued on March 18, 2010, the tenth anniversary of the blog. Joel on Software was "one of the first blogs set up by a business owner".

In 2005 Spolsky co-produced and appeared in 12 Weeks with Geeks, a documentary documenting Fog Creek's development of Project Aardvark, a remote assistance tool.

Spolsky has recently started collaborating with Jeff Atwood on Stack Overflow , a free question and answer community website for software developers.

He is the author of five books, including User Interface Design for Programmers and Smart and Gets Things Done. He is also the creator of The Joel Test.