Epstein was born to Jewish parents in New York. He graduated summa cum laude from Columbia with a Bachelor of Arts in 1964. He received a B.A. in jurisprudence from Oxford in 1966 (with first-class honours). He graduated cum laude from Yale Law School with an LL.B. in 1968. He began his teaching career at the University of Southern California Law School.

Epstein is an advocate of minimal legal regulation. In his book Simple Rules for a Complex World (1997), Epstein consolidated much of his previous work, arguing that simple rules work best because complexities create excessive costs. Complexity comes from attempting to do justice in individual cases. Complex rules are justifiable however, according to Epstein, if they can be opted out of. For instance, drawing on Gary Becker, he argues that the Civil Rights Act and other anti-discrimination legislation would better be repealed. Consistent with libertarian principles, he believes that the federal regulation on same-sex marriage, DOMA, should be repealed, stating:

Under our law, only the state may issue marriage licenses. That power carries with it a duty to serve all-comers on equal terms, which means that the state should not be able to pick and choose those on whom it bestows its favors. DOMA offends this principle in two ways. First, it excludes polygamous couples from receiving these marital benefits. Second, it excludes gay couples. Both groups contribute to the funds that support these various government programs. Both should share in its benefits.

However, in the two cases under discussion (Gill and Massachusetts, both of which had been heard by U.S. District Court Judge Joseph Tauro), Epstein observed that:

To strike down DOMA, Judge Tauro had to reject all state justifications for its definition of marriage. Congress advanced four such justifications for this statute: "(1) encouraging responsible procreation and child-bearing, (2) defending and nurturing the institution of traditional heterosexual marriage, (3) defending traditional notions of morality, and (4) preserving scarce resources." The Justice Department disavowed them all. So much for tradition. Its sole defense of DOMA was that it was needed to preserve the status quo until matters were sorted out politically. Given that open invitation Judge Tauro concluded that all of the justifications offered in DOMA flunked even the lowest "conceivable" standard of rationality. Religious people will surely take umbrage at his one-sentence rebuttals of centuries of tradition.

Epstein's criticism of these two decisions concluded:

Now there is no reason for principle to yield to pragmatism. We don't need a judicial precedent that will spark a nation-wide rerun of California's Proposition 8. We need courts to back off to democratic processes, imperfect as they are.

Epstein views market incentives against discrimination as sufficient to regulate the acknowledged evil, and attempting to give everyone a court hearing only encourages excessive litigation.

In Takings: Private Property and the Power of Eminent Domain (1985) Epstein argues the government should be regarded with the same respect as any other private entity in a property dispute. Though then U.S. Senator Joseph Biden denounced the book during the confirmation hearings of Clarence Thomas for Associate Justice of the Supreme Court of the United States, the book served as a focal point in the argument about the government's ability to control private property. The book has also influenced how some courts view property rights and has been cited by the United States Supreme Court in four cases, including Lucas v. South Carolina Coastal Council from 1992. Epstein's defense of tobacco companies during the 1990s was controversial.

Epstein has said that when voting, he chooses "anyone but the Big Two" who are "just two members of the same statist party fighting over whose friends will get favors"; he has voted Libertarian. Epstein says he is "certainly a Calvin Coolidge fan; he made some mistakes, but he was a small-government guy."