Neil Diamond was born into a Jewish Russian-Polish family, the son of a dry-goods merchant. He grew up in several homes in the New York City borough of Brooklyn, attending Erasmus Hall and Abraham Lincoln High Schools. At Erasmus Hall, he took part in SING! and sang in the school choir with Barbra Streisand, who then spelled her name "Barbara." At Lincoln, the school from which he received his high school diploma, he was a member of the fencing team. He later attended NYU on a fencing scholarship, specializing in épée. In a live interview with TV talk show host Larry King, Neil Diamond explained his decision to study medicine. He said: "I actually wanted to be a laboratory biologist. I wanted to study. And I really wanted to find a cure for cancer. My grandmother had died of cancer. And I was always very good at the sciences. And I thought I would go and try and discover the cure for cancer." However, during his senior year a music publishing company made him an offer he could not refuse to write songs for $50 a week and this started him on the road to stardom.

Diamond’s first recording contract was billed as "Neil and Jack," an Everly Brothers type duo, where Diamond appeared with a high school friend, Jack Packer. They recorded two unsuccessful singles, "What Will I Do" b/w "You Are My Love at Last" and "I'm Afraid" b/w "Till You've Tried Love" both released in 1962. Later in 1962, Diamond signed with the Columbia Records label as a solo performer. Columbia Records released the single "At Night" b/w "Clown Town" in July, 1963. Despite a tour of radio stations, the single failed to make the music charts. Billboard magazine gave an excellent review to "Clown Town" in their July 13, 1963 issue, predicting it would be a hit. Unfortunately sales were once again disappointing and Columbia soon thereafter dropped Diamond from their label. Soon after that, Diamond was back to writing songs on an upright piano above the Birdland Club.

Diamond spent his early career as a songwriter in the Brill Building. His first success as a songwriter came in November, 1965 with the song "Sunday and Me" performed by Jay and the Americans, which was a top 20 hit on the Billboard Charts. Greater early success as a writer followed with "I'm a Believer", "A Little Bit Me, A Little Bit You," "Look Out (Here Comes Tomorrow)," and Love to Love which were all recorded by The Monkees. There is a popular misconception that Diamond wrote and composed these songs specifically for the "Pre-Fab Four." In reality, Diamond had written, composed and recorded these songs to release himself, but the cover versions were released before his own. The unintended, but happy, consequence of this was that Diamond began to gain fame not only as a singer and performer, but also as a songwriter. "I'm a Believer" was the Popular Music Song of the Year in 1966. Other notable artists who recorded early Neil Diamond songs were Elvis Presley, who interpreted “Sweet Caroline” as well as “And The Grass Won’t Pay No Mind”, Mark Lindsay, former lead singer for Paul Revere & the Raiders, also covered "And the Grass Won't Pay No Mind", the English hard rock band Deep Purple which interpreted “Kentucky Woman”, Lulu, who covered “The Boat That I Row”, and Cliff Richard, who released versions of “I’ll Come Running”, “Solitary Man”, "Girl, You'll Be a Woman Soon", “I Got The Feelin’(Oh, No, No), and “Just Another Guy”.

In 1966 Diamond signed a deal with Bert Berns' Bang Records label, which was a subsidary company of Atlantic Records. "Solitary Man" was his first hit. Prior to the release of Solitary Man, Neil considered using a stage name and he came up with two names, "Noah Kaminsky" and "Eice Chary." He was asked by Bang Records which name he was going to use, Noah, Eice, or Neil. He thought of his grandmother (who died prior to the release of Solitary Man), he told Bang Records, "...go with Neil Diamond and I'll figure it out later." Diamond followed it with "Cherry, Cherry", "Kentucky Woman", "I Thank the Lord for the Night Time", "Do It" and others. Diamond's Bang recordings were produced by legendary Brill Building songwriters Jeff Barry and Ellie Greenwich, both of whom can be heard singing background on many of the tracks.

His first concerts saw him being a "special guest" of, or opening for, everyone from Herman's Hermits to, on one occasion, The Who, which he confirmed on an installment of VH1's documentary series program Behind The Music.

Diamond began to feel restricted by Bang Records, wanting to record more ambitious, introspective music. Finding a loophole in his contract with Bang, Diamond tried to sign with a new record label, but the result was a series of lawsuits that coincided with a dip in his professional success. Diamond eventually triumphed in court, and secured ownership of his BANG-era master recordings in 1977.

After Diamond had signed a deal with the MCA Records label of Universal Pictures' parent company, MCA Inc., whose label was then called the Uni Records label in the late 1960s, he moved to Los Angeles, California in 1970. His sound mellowed, with such songs as "'Cracklin' Rosie," "Sweet Caroline," "Holly Holy", and the country-and-western tinged "Song Sung Blue", which reached #1 on the Hot 100. "Sweet Caroline" was Diamond's first major hit after his slump. Diamond recently admitted in 2007 he had written "Sweet Caroline" for Caroline Kennedy after seeing her on the cover of LIFE magazine in an equestrian riding outfit. It took him just one hour in a Memphis hotel to pen the song. The 1971 "I Am...I Said" was a top five hit in both the U.S. and UK and was his most intensely personal effort to date, taking upwards of four months to complete.

In 1972, Diamond played ten sold out concerts at The Greek Theatre (hence the name of his cryptically-titled album 'Love At The Greek') in Los Angeles. During one of these concerts, he said "Tree people out there, God bless you. I'm singing for you, too," referring to the people hiding and listening from the trees on the hills surrounding the theatre. The performance on Thursday August the 24th was recorded and released as the live double album Hot August Night. This album demonstrates Diamond's skills as a performer and showman, as he reinvigorated his back catalogue of hits with new energy; critic Stephen Thomas Erlewine calls Hot August Night "the ultimate Neil Diamond record ... shows Diamond the icon in full glory." The album has become a classic, and in Australia, spent a remarkable 29 weeks at number 1 on the music charts; in 2006, it was voted #16 in a poll of favourite albums of all time in Australia. Also, in 1976 Neil Diamond's final concert of his 1976 Australian Tour (The "Thank You Australia" Concert) was broadcast over Channel 9 Australia to 36 television outlets nationwide on March 6, 1976 and remains the most popular and most watched music event ever broadcast in Australia. It also set a record for the largest attendance ever at the Sydney Sports Grounds. The 1977 concert Love at The Greek, a return to the Greek Theatre, includes a version of "Song Sung Blue" with duets with Helen Reddy and Henry Winkler a.k.a. Arthur "The Fonz" Fonzarelli of Happy Days.

In 1973, Diamond hopped labels again, this time returning, at great expense, to the Columbia Records label, where he recorded the soundtrack to Hall Bartlett's film version of Jonathan Livingston Seagull, which grossed more than the film itself did. The film received hostile reviews and did poor box-office business, and even Richard Bach, author of the source story, disowned the film. Despite the shortcomings of the film, the soundtrack was a success, peaking at number 2 on the Billboard albums chart. The film score would also earn Diamond both a Golden Globe and a Grammy Award. In 1974, Diamond released the album Serenade, from which the songs "Longfellow Serenade" and "I've Been This Way Before" were released. The second of those, though it had been intended for the Jonathan Livingston Seagull score, was completed too late for inclusion on it. In 1976, he released Beautiful Noise, produced by The Band's Robbie Robertson.

On Thanksgiving night, 1976, Neil made an appearance at The Band's farewell concert, The Last Waltz. He performed one song, "Dry Your Eyes", which he had jointly written and composed with The Band's Robbie Robertson, and which had appeared on what was then his most recent album, Beautiful Noise. In addition, he joined the rest of the performers onstage at the end in a rendition of Bob Dylan's I Shall Be Released.

In 1977, Diamond released an album titled I'm Glad You're Here With Me Tonight, which included the selection "You Don't Bring Me Flowers." He had composed its music and collaborated on its lyrics with Alan Bergman and Marilyn Bergman. The song was covered by Barbra Streisand on her album Songbird, which led Gary Guthrie, then Program Director at WAKY Radio in Louisville, Kentucky, to combine the two recordings in a virtual duet. The popularity of the virtual duet motivated Diamond and Streisand to record the real thing, which was a number one hit in 1978 and became his third song to top the Hot 100 to date. His last 1970s album was September Morn, which includes his new recorded version of I'm a Believer. It and Red Red Wine are the two best-known selections of his authorship and composition to have had other artists make them more famous than his own versions.

A movie version of "You Don't Bring Me Flowers" was planned to star Diamond and Streisand, but plans fell through when Diamond starred in a remake of the Al Jolson classic The Jazz Singer in 1980, opposite Sir Laurence Olivier and Lucie Arnaz. Though the movie was not a blockbuster hit at the box office, the soundtrack was a hugely successful album, spawning the 3 Top 10 singles "Love on the Rocks", "Hello Again", and "America". For his role in the film itself, Diamond became the first ever Winner of a Worst Actor Razzie Award, yet he was nominated for a Golden Globe Award for the same role.

Another Top 10 chart selection, "Heartlight," was inspired by the blockbuster 1982 movie E.T. The Extra-Terrestrial. Though the film's title character is never actually mentioned anywhere in the lyrics, Universal Pictures, which had released E.T. The Extra-Terrestrial and was the parent company of the Uni Records label, by then referred to as the MCA Records label, for which Diamond had recorded for years, briefly threatened legal action against both Diamond and the Columbia Records label.

Diamond’s record sales slumped somewhat in the 1980s and 1990s, and as of this time, his last single to make the Billboard’s Pop Singles chart was in 1986. However, his concert tours continued to be big draws. Billboard magazine ranked Diamond as the most profitable solo performer in 1986. In January 1987, Diamond sang the national anthem at the Super Bowl. His song America was the theme song for the Michael Dukakis 1988 Presidential campaign. That same year, UB40’s reggae interpretation of Diamond’s ballad “Red Red Wine”, would top the Billboard’s Pop Singles chart. Like The Monkees version of “I’m a Believer”, the song became better known than Diamond’s original version.

During the 1990s Diamond would produce six studio albums. He would cover many classics from the movies and from the famous Brill Building song writers. He also released two Christmas albums, the first peaking at number eight on the Billboard’s Album chart. Keeping his song writing skills honed, Diamond also recorded two albums of mostly new material during this period.

The 1990s and 2000s saw a resurgence in Diamond’s popularity. “Sweet Caroline” became a popular sing-along at sporting events. It started being played at both Boston College football and basketball games. Most notably it is the theme song for Red Sox Nation (despite Neil Diamond’s frequent assertions that he has been a lifelong “Yankee fan”). The song also gets playing time during the 8th inning of every Mets home game at Shea Stadium, and at the Washington Nationals home games. The New York Rangers have also adapted it as their own, and play it when they are winning at the end of the 3rd period. Urge Overkill recorded a memorable version of Diamond’s “Girl, You'll Be a Woman Soon" for Quentin Tarantino’s Pulp Fiction released in 1994. In 2000, Johnny Cash recorded the album Solitary Man which included that Diamond classic. Smash Mouth covered Diamond’s “I’m a Believer” for their 2001 self-titled album. In the 2001 comedy film Saving Silverman the main characters play a Neil Diamond cover band, and Diamond made an extended cameo appearance as himself. During this period, Will Ferrell did a recurring impersonation of Neil on Saturday Night Live, with Diamond himself appearing alongside Ferrell on the final show as a Not Ready For Prime Time Player in May 2002. Diamonds song “America” was used in promotional advertisements for the 2002 Winter Olympics in Salt Lake City. The Finnish band HIM covered “Solitary Man” on their album And Love Said No: The Greatest Hits.

Diamond has always had a somewhat polarizing effect, best exemplified by the 1991 film What About Bob? There the protagonist posits, "There are two types of people in the world: those who like Neil Diamond and those who don't." The character "Bob" attributes the failure of his marriage to his fiancee's fondness for Neil Diamond.

Diamond continues to tour and record. 12 Songs, recorded with producer Rick Rubin was released on November 8, 2005 in two editions: a standard 12-song release, and a special edition with two bonus tracks, including one featuring backing vocals by Brian Wilson. The album debuted at #4 on the Billboard album chart, and has received generally positive reviews; Earliwine describes the album as "inarguably Neil Diamond's best set of songs in a long, long time." 12 Songs also ended up being infamous for being one of the last albums to be pressed and released by Sony BMG with the infamous XCP digital rights management software embedded onto the disc. (See the 2005 Sony BMG CD copy protection scandal.)

On December 31, 2005 Diamond appeared on Dick Clark's New Year's Rockin' Eve 2006. On January 15, 2006, Diamond performed a concert on the opening night of the new Stockton Arena in Stockton, California. Diamond had been paid a $1,000,000 fee to perform, but, due to slow ticket sales and inadequate time to promote the event, the city budget suffered a nearly $400,000 loss that resulted in the dismissal of the Stockton city manager several days later.

In 2007 he was inducted into the Long Island Music Hall of Fame, in 2007.

In December 2007, a 2008 UK tour was announced calling at Manchester on June 7th & 8th, Birmingham on June 10th & 11th, & London on the June 21st, 23rd & 24th. A month later, further UK dates were added including Hampden Park in Glasgow on the 5th June, Rose Bowl, Southampton on the 17th June & the Millennium Stadium in Cardiff on the 19th June. On January 31, 2008 it was announced that he would also appear at the upcoming Glastonbury Festival in the UK.

On March 19, 2008, it was announced on the TV show, American Idol, that Neil Diamond would be a guest mentor to the remaining Idol contestants who would be singing Diamond songs on shows to be broadcast on April 29 and 30, 2008. On April 8, 2008, Diamond made a surprise announcement in a big-screen broadcast at Fenway Park (home of the world champion Boston Red Sox), that he would be appearing there "live in concert" on August 23, 2008 as part of his World Tour. The announcement, which marked the first official confirmation of any 2008 concert dates in the USA, came during the traditional eighth-inning sing-along of his "Sweet Caroline," which has become an anthem for Boston fans.

On April 28, 2008, Diamond appeared on the roof of the Jimmy Kimmel building to sing Sweet Caroline after Kimmel was jokingly arrested after trying to sing the song. This was followed on April 30, 2008, with an appearance on American Idol singing his song Pretty Amazing Grace from his new album Home Before Dark. On May 2, 2008 Sirius Satellite Radio started Neil Diamond Radio.

Diamond's new album Home Before Dark was released on May 6, 2008. On May 15, 2008, the Billboard Hot 200 listed the album at number one. This marked the first chart-topping album of Diamond's storied career. On May 18, 2008, the album also entered the UK Album Chart at number one. It was his second British number one on that chart, after hitting the summit in 1992 with a compilation-album. Currently, his 2008 tour is the most successful of any of his previous tours since 1966.

On August 25, 2008, Diamond performed at Ohio State University while suffering from laryngitis. The result disappointed him as well as his fans and on August 26 he offered ticket price refunds to everybody who applied by September 5.

Diamond will be honored as the MusiCares Person of the Year on February 6, 2009; two nights prior to the 51st Annual Grammy Awards.