Kaufman graduated from Yale University with the class of 1968, where he majored in Chinese studies. Originally intending to become a social worker, he became friends with student filmmaker Robert Edelstein and Eric Sherman (son of filmmaker Vincent Sherman), who introduced him to his future lifelong obsesssion, cinema. Some of Lloyd's favorite filmmakers include John Ford, Kenji Mizoguchi, Ernst Lubitsch and Stan Brakhage.
In 1966, Lloyd went on a hiatus from his studies and spent a year in the bush of Chad for USAID as a pathfinder for the Peace Corps.
Returning to Yale, he produced Robert Edelstein's low-budget film Rappaccini and directed his own first feature, an experimental black and white film entitled The Girl Who Returned. The film was presented at film societies at Yale, Harvard, and other east coast institutions. Following his graduation, Kaufman went on to work for Cannon Films, where he met John G. Avildsen (future Academy Award-winning director of Rocky and The Karate Kid). The two collaborated for several years, making low-budget films including Joe and Cry Uncle. During this period, Kaufman also directed and starred in his second feature film, The Battle of Love's Return, which garnered positive reviews in publications such as The New York Times, wrote and produced the lesbian thriller Sugar Cookies (with Oliver Stone), and wrote and directed another film, the Israeli comedy flop Big Gus, What's the Fuss?.
From 1973-1979 Kaufman produced and directed a handful of adult films in New York under the pseudonym "Louis Su". He directed at least three: The Divine Obsession, The Newcomers, and Sweet & Sour , and has been credited for producing at least three more.
In 1974, Kaufman and his business partner Michael Herz founded Troma Entertainment and began producing and distributing independent action and comedy films. In order to pay the bills, Kaufman did freelance work for various Hollywood productions, including Rocky, Saturday Night Fever, and The Final Countdown, which he also produced (Kaufman has said that it was his experience on this film that made him never want to deal with a major studio again). From 1979 to 1981, the two wrote, produced and directed a series of profitable "sexy comedies", precursors to such films as Porky's, including Squeeze Play!, Waitress!, Stuck on You! and The First Turn-On!. On most of these early films, Kaufman is credited as "Samuel Weil" (the name of Kaufman's maternal great-grandfather), a pseudonym which Kaufman used to skirt Directors Guild of America rules.
In 1985, Troma experienced mainstream success with another Kaufman/Herz production, the violent, darkly comic superhero film The Toxic Avenger. Toxic went on to become Troma's most popular movie, inspiring three sequels, a Saturday morning children's television show, comic books and tons of merchandise. The Toxic Avenger, or "Toxie", as he is affectionately known, is now Troma's official mascot.
Kaufman's follow-up to The Toxic Avenger was the relatively popular Class of Nuke 'Em High, which he co-directed with Richard W. Haines. Riding on the success of the Toxic Avenger, Nuke 'em inspired two profitable sequels and a healthy run on late night cable shows such as USA Up All Night. At one time, Class of Nuke 'Em High was the highest-selling VHS for Troma.
Troma experienced a lull in popularity after Kaufman's next two films, Troma's War and Sgt. Kabukiman N.Y.P.D., failed to make an impression at the box office. From 1995 to 2000, Kaufman rebounded with three critically acclaimed independent films: 1996's Tromeo and Juliet, a loose parody of Shakespeare's play; 1999's Terror Firmer, a slasher film set on the set of a Troma movie (with Kaufman playing a caricature of himself), and the fourth installment in the Toxic Avenger franchise, Citizen Toxie: The Toxic Avenger IV.
Troma's exerienced some financial hardship after the botched funding of a low-budget video feature titled Tales from the Crapper, which cost $250,000 despite most of the footage being completely unusable. India Allen, one of the producers, backed out of the film halfway through, and sued Troma, citing breach of contract, slander per se, sexual harassment and trade slander. Lloyd personally supervised a reshoot in an attempt to salvage the film, dividing the footage into two parts and recasting the film as a double-feature. Tales from the Crapper was released on DVD in September of 2004, eventually making its money back through DVD sales.
Today, Troma still produces and acquires independent films, despite many financial hardships and limitations. Troma Films has distributed many films from third parties including Trey Parker's Cannibal! The Musical. Lloyd himself encourages independent filmmaking, making cameo appearances in many low-budget horror films, often for free. Among his more recent appearances is in former collaborator James Gunn's directing debut, Slither.
Kaufman's latest film, Poultrygeist: Night of the Chicken Dead, made its official New York premiere on May 9th, 2008 (despite that the film had made numerous previews on single screens for over a year). On its opening weekend, it had the second highest per-screen average ticket sales, beating out the big-budget Speed Racer, and opened to positive reviews from Entertainment Weekly, The New York Times, and was made a critics pick by New York Magazine and Salon.com.
In September 2008, a staged musical version of The Toxic Avenger will open at the George Street Playhouse in New Brunswick, New Jersey. Directed by Tony Award winner John Rando, The Toxic Avenger Musical features music from Bon Jovi founding member, David Bryan.
All films from Waitress to Sgt. Kabukiman N.Y.P.D. were co-directed with college buddy and Troma Vice President Michael Herz