Rufus Wainwright was born in Rhinebeck, New York, to folk singers Kate McGarrigle and Loudon Wainwright III (a direct descendant of Peter Stuyvesant, the last Director-General of New Netherland). His parents divorced when he was 3 years old, and he lived with his mother in Montreal, Canada, for most of his youth. Wainwright is both a U.S and Canadian citizen. He attended high school at the Millbrook School in downstate New York – which would later inspire his song "Millbrook" – and later briefly studied piano at Concordia and McGill Universities in Montreal, Quebec, Canada. He began playing the piano at age six and started touring at thirteen with "The McGarrigle Sisters and Family", a folk group featuring Rufus, his sister Martha, his mother Kate, and aunt Anna. His song "I'm A-Runnin'", which he performed in the movie Tommy Tricker and the Stamp Traveller, earned him a nomination for a 1989 Genie Award for Best Original Song. He was also nominated for a 1990 Canadian Juno Award for Most Promising Male Vocalist of the Year.

Wainwright became interested in opera during his adolescent years, and the genre strongly influences his music. (For instance, his track "Barcelona" features lyrics from the libretto of Giuseppe Verdi's opera Macbeth.) During this time, he also became deeply interested in Édith Piaf, Al Jolson, and Judy Garland.

Through weekly shows at Cafe Sarajevo, Wainwright became a fixture on the Montreal club circuit and eventually cut a series of demo tapes produced by Pierre Marchand, who also later produced Wainwright's album Poses. DreamWorks executive Lenny Waronker acquired the demo tapes and signed Wainwright to his label. The singer moved to New York City in 1996 and began performing regularly at Club Fez, building a loyal local audience. He relocated to Los Angeles later that year and began recording his first studio album, 1998's Rufus Wainwright.

Wainwright's self-titled debut received critical acclaim; Rolling Stone recognized it as one of the best albums of the year, and named the singer "Best New Artist" of the year.

Wainwright's album Want Two, from which four songs were released as the EP Waiting For A Want, was released by DreamWorks/Geffen on November 16, 2004. It is a companion/sequel to the 2003 release Want One. The Want One and Want Two albums were repackaged as Want for a November 2005 release to coincide with the beginning of a British tour.

In addition to his tenor singing voice, he plays both piano and the guitar, often switching between the two instruments when performing live. While some of his songs feature just Wainwright and his piano, his later work is often accompanied by rock instrumentation or a symphony orchestra, displaying complex layering and harmonies with an operatic feel. Wainwright is an avid fan of opera and Franz Schubert's Lieder. Some of Wainwright's songs have been described as "popera" (pop opera) or "baroque pop".