Sánchez was born and raised by his parents in the city of Humacao, Puerto Rico, which is located in the southeastern part of Puerto Rico. There he received his primary education. His family moved to San Juan where Sánchez continued to receive his secondary and higher education. He enrolled in the University of Puerto Rico in 1955 after graduating from high school, earning a Bachelor of Arts degree. It was during his days as a student at the university that he became interested in acting.

Sánchez's interest in literature led him to enroll at the City University of New York where in 1959 he earned his Master's Degree in dramatic arts. He eventually went to Madrid, Spain and earned his Doctorate in Literature in 1976 from the Complutense University of Madrid.

Sánchez's best known play is La Pasión según Antigona Pérez (The Passion of Antigona Perez), a tragedy set in present day Latin America, suggested by Sophocles' "Antigone". The character of "Antigona" was based on the life of Olga Viscal Garriga (1926—1995). Her life was rooted in politics and her 3 children. She was a member of the Puerto Rican Nationalist Party and an accomplished speaker who spent time in jail for her political beliefs yet, she saw herself as a simple woman with simple needs. But she was not a simple woman with simple needs, she was a very complex woman with many facets of her personality.

The world premiere production took place in 1968 at Old San Juan's Tapia Theater, starring Myrna Vazquez as "Antigona", during the 11th Annual Puerto Rican Theater Festival. A highly acclaimed all-star revival opened in 1991 at San Juan's Performing Arts Center featuring Alba Nydia Diaz as "Antigona", Walter Rodriguez as "Creon", Samuel Molina as "Monsignor Escudero", Marian Pabon as "Pilar Vargas", Noelia Crespo as "Aurora", and Julia Thompson as "Irene". The production which integrated video and broadcast technology was directed by Idalia Perez Garay for Teatro del Sesenta Theater Company. It featured original music by Pedro Rivera Toledo, sets by Checo Cuevas, and film sequences supervised by well-known Puerto Rican filmmaker Luis Molina Casanova.

La Guaracha del Macho Camacho (Macho Camacho's Beat) was published in 1976. This novel moves to a guaracha, a Latin rhythm, is was a band, inviting readers to imagine (or learn) what this beat sounds like. It has been suggested that the song itself is the real protagonist of the tale. The Americanization of Puerto Rico is explored in this work, as well as the topic of Puerto Rican politics and the political situation of the island as a colony. One aspect of this examination can be seen as a critique of Puerto Ricans who give up their culture to assimilate into the American culture as compared to Puerto Ricans who refuses to let go of their cultural identity. The book was translated into English by Gregory Rabassa.

In the essay "La guagua aérea" or "The Flying Bus", Sánchez explores the concept of a bi-polar culture, the question of assimilation and opposition to U.S. Anglo culture. Sánchez also wrote En cuerpo de camisa (In Shirt Sleeves, 1966), which is a collection of short stories.

Luis Rafael Sánchez is now a professor emeritus at the University of Puerto Rico and the City University of New York. He also travels to Europe and Latin America where he has been involved in the teachings and works of theater.

Among his other works are the following:

• Los ángeles se han fatigado (Play, 1960)

• Farsa del amor compradito (Play, 1960)

• La hiel nuestra de cada día (Play, 1960)

• Sol 13, interior (Play, 1961)

• O casi el alma (Play, 1965)

• En cuerpo de camisa (Short Story Collection, 1966)

• Quintuples (Play, 1985)

• La importancia de llamarse Daniel Santos (Novel, 1988)

• No llores por nosotros Puerto Rico (Essay Collection, 1998)

• Indiscreciones de un perro gringo (Novel, 2007)

Some of the books written about Sánchez are:

• El Teatro de Luis Rafael Sánchez (The Theater of Luis Rafael Sánchez) by Eliseo Colón Zayas
• Luis Rafael Sánchez: pasión teatral (Luis Rafael Sánchez: Theatrical Passion) by Gloria Waldman (also focuses on his theater production)
• Puerto Rican Cultural Identity and the Work of Luis Rafael Sánchez by John Dimitri Perivolaris
• Para leer en puertorriqueño (In Order to Read in Puerto Rican) by Efraín Barradas
• La narrativa de Luis Rafael Sánchez: texto y contexto (The Narrative Work of Luis Rafael Sánchez) by Alvin Joaquín Figueroa

Colón Zayas and Waldman focus on theater, while Perivolaris, Barradas, and Figueroa analyze the narrative production of the author.