Norton was born in Boston, Massachusetts, and grew up in Columbia, Maryland. His mother Robin, an English teacher, died of a brain tumor in 1997; his father, Edward Sr. is an attorney and former federal prosecutor under the Carter administration who now works for the National Trust for Historic Preservation. Norton Jr. is the grandson of developer James Rouse (also see The Rouse Company), who designed the city of Columbia, Maryland (where Norton grew up) and who also helped develop Baltimore's Inner Harbor and Boston's Quincy Market. His sister, Molly Norton, attended Washington and Lee University. He has collaborated professionally with his brother Jim.

Norton graduated from Wilde Lake High School in 1987, then from Yale University in 1991 with a B.A. in history. It was at Yale that Norton became heavily involved in theater, taking as many classes as he could although never majoring in drama. Actor Ron Livingston was a classmate and fellow collegiate actor. He also had a brief stint in Japan, teaching English at the largely popular English Language School, NOVA Group. Norton relocated to New York City where he began waiting tables and doing Off-Broadway theater.

Norton was launched into the spotlight by 1996's Primal Fear, in which he played a young sociopathic convict, and for which he won a Golden Globe and a nomination for the Oscar for Best Supporting Actor. He earned numerous nominations, including an Best Actor nomination, for his role as a reformed neo-Nazi in 1998's American History X, and starred in the 1999 adaptation of Chuck Palahniuk's cult hit novel Fight Club. More recently, he played himself in a cameo role in the experimental comedy show Stella, and won critical acclaim for his role as the leper king in Kingdom of Heaven.

Norton has put time and money toward social activist causes, including improving the quality of living in low-income communities.

He has dated actresses Salma Hayek and Drew Barrymore, as well as musician/actress Courtney Love, with whom he toured as a temporary guitarist for alternative band Hole.