Villoldo graduated in 1969 with a bachelor's degree in Inter-American Studies, followed by a master's in Psychology (1972), and a doctorate in psychology at the Humanistic Psychology Institute . His thesis advisor was Dr. Stanley Krippner), a consciousness researcher and a pioneer in the study of the paranormal phenomena, with whom he later co-authored Healing States: A Journey Into the World of Spiritual Healing and Shamanism. While on the faculty of San Francisco State University, Villoldo founded and directed the Biological Self Regulation Laboratory at San Francisco State University , where he investigated the effects of energy healing on blood and brain chemistry.

Villoldo cites a number of key Shaman mentors, who shared their Shamanic knowledge with him through his years in Peru and the Amazon:

• Don Antonio Morales - Both a shaman, and a University Professor in Cusco, who spoke Quechua the language of the Inca, and who travelled with Villoldo for more than ten years gathering shamanic knowledge of a great many tribes and cultures through the Andes, and the Amazon.
• Don Manuel Quispe - A Q'ero medicine man who for seven years taught with Villoldo the ways of the kurak akuyek, the Andean Shamanic degrees.
• Dona Laura - An Andean medicine woman who lived near Mt Ausangate the Inka holy mountain and was one of Villoldo's teachers
• Don Eduardo Calderon - A fisherman, and coastal shaman, who taught Villoldo to work with spirits.

There is a controversy between the form of participatory engagement of teachers like Alberto Villoldo and the more traditional non-participatory anthrolopogical approach.

Since 1984 Villoldo directs The Four Winds Society, where he trains individuals in the practice of energy medicine and soul retrieval. The school maintains an office in Park City, Utah, and teaches in in New England, California, and Utah, and internationally in Canada, the UK, the Netherlands, Sweden, Ireland and Australia.

In 2006 he was instrumental in bringing the Munay-ki (9 Rites of Initiation) from the Andes to be accessible to anyone called to receive them. The Munay-ki are not indigenous rites, but Villoldo's modified version of traditional rites which have been stripped of their traditional Qero cultural forms in order to be more accessible to westerners. This was controversial within The Four Winds Society and caused the resignation of several principle teachers.

A prolific author, he draws on his experiences in South America and on his knowledge of shamanic and energy healing; among his most popular books are Dance of the Four Winds, and Shaman, Healer, Sage. He also founded "The Sanctuary Project", which provides support and shelter to indigenous Q'ero shaman who work for The Four Winds Society. He has coauthored a number of books with Erik Jendresen.