Born in Tulsa, Oklahoma, he is a graduate of Holland Hall School and Brown University and a classicist. While at Brown, Nelson also played goalie on the men's Junior Varsity hockey team.

He has appeared as an actor in Holes, Heavyweights, Minority Report, Meet the Fockers, The Good Girl, Syriana, and the critically-acclaimed HBO film, Warm Springs. Nelson also had a featured role as Delmar in the film O Brother, Where Art Thou?. According to directors Joel and Ethan Coen, he was the only one in the cast or crew who had read Homer's Odyssey, the work upon which the film is based.

Films he has directed include The Grey Zone, Eye of God, and O, based on William Shakespeare's play Othello but set in a modern-day high school.

He is on the Board of Directors for The Actors Center in New York City.

Tim Blake Nelson is Jewish on his mother's side. His mother's parents escaped the Nazis during World War II and fled to the USA.