Futterman, one of four siblings, was born in Brooklyn, New York, to a lawyer father and a psychoanalyst mother. He was raised in Conservative Judaism and grew up in an "intellectual family".Futterman grew up in Larchmont, New York, and graduated from Columbia University in 1989.

Futterman is married to television writer Anya Epstein (sister of Boston Red Sox General Manager and Executive Vice President Theo Epstein), with whom he has two daughters: Sylvie (b. 2001) and Eve (b. 2005).

In 1991, Futterman landed his first stage role in the WPA production Club Soda. He also succeeded Joe Mantello as the voluble Louis Ironside in Tony Kushner's Angels in America on Broadway in 1993. Futterman portrayed an American diplomat's son who runs into trouble in South Africa in Jon Robin Baitz's A Fair Country (1996). He portrayed a slick card player with big dreams in Dealer's Choice (1997).

Futterman's first film role was as a thug who menaces Robin Williams in The Fisher King (1991). He appeared as a teacher in the romantic comedy Breathing Room/'Til Christmas (1996). Far Harbor/Mr. Spreckman's Boat (also 1996) was an ensemble piece which featured Futterman as a smarmy doctor in an interracial relationship. Also in 1996 he played Val, the son of gay lovers and nightclub owners Albert and Armand in The Birdcage. He also appeared as the American half of a pair of twenty-something con artists in London in Shooting Fish (1997). Futterman's most recent film is A Mighty Heartwith Angelina Jolie; he portrays murdered journalist Daniel Pearl.

Futterman has also made several guest appearances in primetime television. He costarred with Mickey Rourke as a teacher who clashes with a priest in Thicker Than Blood (TNT, 1998) and appeared alongside Ron Eldard and Martin Donovan in the World War II drama When Trumpets Fade (HBO, 1998). In 1999, Futterman made the leap to series TV, co-starring as the brother of the central character on the CBS series Judging Amy. Futterman also had a recurring role as the on-again, off-again boyfriend of a beautiful and gainfully-employed woman (Kiele Sanchez on the WB drama Related. He also guest-starred in a four-episode story arc on the sitcom Will and Grace. Futterman was slated to appear in a recurring role on the new Abcdrama Brothers & Sisters, also written by Jon Robin Baitz, but bowed out due to scheduling conflicts. Previously he also played a metrosexual man on Sex and the City.

Futterman wrote the screenplay for Capote, and Futterman's friend Bennett Miller served as director and producer. Futterman and Miller graduated together from Mamaroneck High School and have been friends since 7th grade. The two recruited another old friend, actor Philip Seymour Hoffman to star as Capote and began the process of getting the independent film made. Futterman was recognized with several award nominations, including an Oscar nod for Best Adapted Screenplay.

2007, Futterman stated that he will focus on his writing career. He is adapting the novel Everything Changes into a film script for Columbia Pictures.