Groening was born on February 15, 1954, in Portland, Oregon, the middle of five children (older sister Patty and brother Mark were born in 1943 and 1950, and younger sisters Lisa and Maggie in 1956 and 1958, respectively). His Norwegian American mother, Margaret Ruth (née Wiggum; March 23, 1919 – April 22, 2013), was once a teacher, and his German Canadian father, Homer Philip Groening (December 30, 1919 – March 15, 1996), was a filmmaker, advertiser, writer and cartoonist. Homer, born in Main Centre, Saskatchewan, Canada, grew up in a Plautdietsch-speaking family.

Groening's grandfather, Abram A. Groening, was a professor at Tabor College, a Mennonite Brethren liberal arts college in Hillsboro, Kansas, before moving to Albany College (now known as Lewis and Clark College) in Oregon in 1930.

Groening was raised in Portland and attended Ainsworth Elementary School and Lincoln High School. Following his high school graduation in 1972, Groening attended the Evergreen State College in Olympia, Washington, a liberal arts school that he described as "a hippie college, with no grades or required classes, that drew every weirdo in the Northwest." He served as the editor of the campus newspaper, The Cooper Point Journal, for which he also wrote articles and drew cartoons. He befriended fellow cartoonist Lynda Barry after discovering that she had written a fan letter to Joseph Heller, one of Groening's favorite authors, and had received a reply. Groening has credited Barry with being "probably [his] biggest inspiration." He first became interested in cartoons after watching the Disney animated film One Hundred and One Dalmatians, and he has also cited Robert Crumb, Ernie Bushmiller, Rocky and Bullwinkle, Ronald Searle, Monty Python, and Charles M. Schulz as inspirations. Groening graduated with a Bachelor of Arts in journalism in 1977.

In 1977, at age 23, Groening moved to Los Angeles to become a writer. He went through what he described as "a series of lousy jobs", including being an extra in the television movie When Every Day Was the Fourth of July, busing tables, washing dishes at a nursing home, clerking at the Hollywood Licorice Pizza record store, landscaping in a sewage treatment plant, and chauffeuring and ghostwriting for a retired Western director.
Groening described life in Los Angeles to his friends in the form of the self-published comic book Life in Hell, which was loosely inspired by the chapter "How to Go to Hell" in Walter Kaufmann's book Critique of Religion and Philosophy. Groening distributed the comic book in the book corner of Licorice Pizza, a record store in which he worked. He made his first professional cartoon sale to the avant-garde Wet magazine in 1978. The strip, titled "Forbidden Words", appeared in the September/October issue of that year.

Groening had gained employment at the Los Angeles Reader, a newly formed alternative newspaper, delivering papers, typesetting, editing and answering phones. He showed his cartoons to the editor, James Vowell, who was impressed and eventually gave him a spot in the paper. Life in Hell made its official debut as a comic strip in the Reader on April 25, 1980. Vowell also gave Groening his own weekly music column, "Sound Mix", in 1982. However, the column would rarely actually be about music, as he would often write about his "various enthusiasms, obsessions, pet peeves and problems" instead. In an effort to add more music to the column, he "just made stuff up," concocting and reviewing fictional bands and nonexistent records. In the following week's column, he would confess to fabricating everything in the previous column and swear that everything in the new column was true. Eventually, he was finally asked to give up the "music" column. Among the fans of the column was Harry Shearer, who would later become a voice actor on The Simpsons.

Life in Hell became popular almost immediately. In November 1984, Deborah Caplan, Groening's then-girlfriend and co-worker at the Reader, offered to publish "Love Is Hell", a series of relationship-themed Life in Hell strips, in book form. Released a month later, the book was an underground success, selling 22,000 copies in its first two printings. Work Is Hell soon followed, also published by Caplan. Soon afterward, Caplan and Groening left and put together the Life in Hell Co., which handled merchandising for Life in Hell. Groening also started Acme Features Syndicate, which initially syndicated Life in Hell as well as work by Lynda Barry and John Callahan, but would eventually only syndicate Life in Hell. At the end of its run, Life in Hell was carried in 250 weekly newspapers and h…

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Groening and Deborah Caplan married in 1986 and had two sons together, Homer (who goes by Will) and Abe, both of whom Groening occasionally portrays as rabbits in Life in Hell. The couple divorced in 1999.

In 2011, Groening married Agustina Picasso, an Argentine artist, after a four-year relationship, and became stepfather to her daughter Camila Costantini. In May 2013, Picasso gave birth to Nathaniel Philip Picasso Groening, named after writer Nathanael West. She joked that "his godfather is SpongeBob's creator Stephen Hillenburg". In 2015, Groening's daughters Luna Margaret and India Mia were born. On June 16, 2018, he became the father of twins for a second time when his wife gave birth to Sol Matthew and Venus Ruth, announced via Instagram. In 2020, their daughter Nirvana was born. In January 2022, they had another child, Satori.

Groening's brother-in-law is Hey Arnold!, Dinosaur Train, and Ready Jet Go! creator, Craig Bartlett, who is married to Groening's sister, Lisa, but they separated in 2015. Bartlett used to appear in Simpsons Illustrated.

Groening is a self-identified agnostic.
Groening has made a number of campaign contributions, all towards Democratic Party candidates and organizations. He has donated money to the unsuccessful presidential campaigns of Democratic candidates Al Gore in 2000 and John Kerry in 2004, as well as previously donating to Kerry's campaign for Senator from Massachusetts. Groening also collectively donated to the Democratic senatorial campaign committee and to the Senate campaigns of Barbara Boxer (California), Dianne Feinstein (California), Paul Simon (Illinois), Ted Kennedy (Massachusetts), Carl Levin (Michigan), Hillary Clinton (New York), Harvey Gantt (North Carolina), Howard Metzenbaum (Ohio), and Tom Bruggere (Oregon). He also donated to the now-defunct Hollywood Women's Political Committee, which supported and campaigned for the Democratic Party. His first cousin on his mom's side, Laurie Monnes Anderson, was a member of the Oregon State Senate, representing eastern Multnomah County.

In an interview with Wired from 1999, he stated that if he were president, his first act would be "campaign finance reform", observing that modern campaign funding is "a real detriment to democracy".

Groening has a great disdain towards former President Richard Nixon, and enjoyed ridiculing him by making him the butt of jokes in The Simpsons and Futurama.