Moody studied philosophy at the University of Virginia, United States, where he obtained a B.A. (1966), an M.A. (1967) and a Ph.D (1969) in the subject. He also obtained a Ph.D in psychology from the University of West Georgia, then known as West Georgia College, where he later became a professor in that topic.

In 1976, he was awarded an M.D. from the Medical College of Georgia. In 1998 Moody was appointed Chair in Consciousness Studies at the University of Nevada, Las Vegas. After obtaining his M.D., Moody worked as a forensic psychiatrist in a maximum-security Georgia state hospital. Moody has been married three times. As of 2004, he is married to Cheryl, and they have one adopted son, Carter, and one adopted daughter, CarolAnne. Moody was born in Porterdale, Georgia and currently lives in rural Alabama. In an interview in 1993, Moody stated he was placed in a mental hospital by his family for his work with mirror gazing.

Moody's most famous book was made into a movie of the same name, Life After Life, for which he won a bronze medal in the Human Relations Category at the New York Film Festival. He was also awarded the World Humanitarian Award.

His much later book The Last Laugh, containing, as he states, material edited out of Life After Life, confused some of his admirers as to his own personal view of NDE phenomena, which he had done so much to publicize. In this book, he says he does not consider them to be conclusive proof of life after death, and is disturbed by the use of his works by religious fundamentalists and New Age gurus to further their causes.

Nonetheless, Moody's own beliefs on NDEs can be summed up with the following quote from his interview with Jeffrey Mislove:

"I don't mind saying that after talking with over a thousand people who have had these experiences, and having experienced many times some of the really baffling and unusual features of these experiences, it has given me great confidence that there is a life after death. As a matter of fact, I must confess to you in all honesty, I have absolutely no doubt, on the basis of what my patients have told me, that they did get a glimpse of the beyond." Life After Life:Understanding Near-Death Experience With Raymond Moody, M.D

The Dr. John Dee Memorial Theater of the Mind is a research institute in Alabama that was founded by Moody as a place where people can experience an altered state of consciousness with the intention of invoking apparitions of the dead. One of the methods used to obtain this altered state is crystallomancy, or "mirror gazing".

Moody has also researched past life regression and believes that he personally has had nine past lives.

From a study of 150 people who had clinically died or almost died, Moody concluded that there are nine experiences common to most people who have had a near death experience. These are:

1. hearing sounds such as buzzing
2. a feeling of peace and painlessness
3. having an out-of-body experience
4. a feeling of traveling through a tunnel
5. a feeling of rising into the heavens
6. seeing people, often dead relatives
7. meeting a spiritual being such as God
8. seeing a review of one's life
9. feeling a reluctance to return to life