Early years Nilsson was born in the Bushwick section of Brooklyn, New York in 1941. His father, Harry Edward Nilsson, Jr., abandoned the family three years later. An autobiographical reference to this is found in the opening to Nilsson's song "1941":

Now, in 1941, a happy father had a son But in 1944, the father walked right out the door Harry grew up with his mother Bette Nilsson and his younger half-sister, his younger brother Drake was left with family or friends during their moves between California and New York, sometimes living with a procession of relatives and stepfathers. One relative who turned out to be an important influence on him was his Uncle John, a mechanic in San Bernardino, California, who taught him to sing properly.

Due to the poor financial situation of his family, Nilsson worked from an early age, including a job at the Paramount Theater in Los Angeles. When the Paramount closed (circa 1960), Nilsson applied for a job at a bank, falsely stating he was a high school graduate on his application (he only made it through 9th grade). He turned out to have an aptitude for computers, which were just starting to be employed by banks at the time. He did so well, in fact, that the bank kept him on even after discovering the lie about his education.

Musical beginnings As early as 1958, Nilsson was hooked on the new wave of music, especially rhythm and blues artists like Ray Charles. He had taken early stabs at performing while he was working at the Paramount, forming a vocal duo with his friend Jerry Smith and singing close harmonies in the style of the Everly Brothers. The manager at a favorite hangout gave Nilsson a plastic ukulele, which he learned to play, following this with guitar and piano. When Nilsson couldn't remember lyrics or parts of the melodies to popular songs, he began to make up his own. This led to writing original songs.

Uncle John's singing lessons, along with Nilsson's natural talent, surely helped when he got a job singing demos for songwriter Scott Turner in 1960. Turner paid Nilsson five dollars for each track they recorded. (Years later, when Nilsson became famous, Turner decided to release these early recordings, and contacted Nilsson to work out a fair payment. Nilsson replied that he had already been paid - five dollars a track.) His job with the bank was on the night shift, so Nilsson spent his days infiltrating Los Angeles music business offices, making friends and developing connections, including one publisher who gave Nilsson a key to his office; this gave him another place to write.

In 1963, Nilsson began to have some early success as a songwriter, working with John Marascalco on a song for Little Richard (Upon hearing Nilsson sing, Little Richard reportedly remarked, "My! You sing good for a white boy!"). Marascalco also financed some independent singles by Nilsson. One, "Baa Baa Blacksheep", was released under the pseudonym Bo Pete to some small local airplay. Another recording, "Donna, I Understand", convinced Mercury Records to offer Nilsson a contract, and release recordings by him under the name Johnny Niles.

In 1964, Nilsson worked with Phil Spector, writing three songs with him. He also established a relationship with songwriter and publisher Perry Botkin, Jr., who began to find a market for Nilsson's songs. His recording contract was picked up by Tower Records, who did nothing with it, but his songs were being recorded by Glen Campbell, Fred Astaire, The Yardbirds, and many other artists. (Despite this growing success, Nilsson was still working the night shift at the bank.)

Signing with RCA Victor Nilsson signed with RCA Victor in 1966 and released an album the following year, Pandemonium Shadow Show, which was a critical (if not commercial) success. Music industry insiders were impressed both with the songwriting, and with Nilsson's pure-toned, multi-octave vocals. One such insider was Beatles press officer Derek Taylor, who bought an entire box of copies of the album to share this new sound with others. With a major-label release, and continued songwriting success (The Monkees had a hit with Nilsson's "Cuddly Toy", after meeting him through their producer Chip Douglas), Nilsson finally felt secure enough in the music business to quit his job with the bank. Monkees member Micky Dolenz maintained a close friendship with Nilsson until his 1994 passing.

Some of the albums from Derek Taylor's box eventually ended up with the Beatles themselves, who quickly became Nilsson fans. This may have been helped by the track "You Can't Do That", in which Nilsson covered one Beatles song but added 22 others in the multi-tracked background vocals. When John Lennon and Paul McCartney held a press conference in 1968 to announce the formation of Apple Corps, John was asked to name his favorite American artist. He replied, "Nilsson". Paul was then asked to name his favorite American group. He replied, "Nilsson".

When RCA had asked if there was anything special he wanted, as a signing premium, Nilsson asked for his own office at RCA, being used to working out of one. In the weeks after the Apple press conference, Nilsson's office phone began ringing constantly, with offers and requests for interviews... and inquiries about his performing schedule. Nilsson usually answered the calls himself, surprising those on the other end of the line, and answered questions candidly. (He recalled years later the flow of a typical conversation: "When did you play last?" "I didn't." "Where have you played before?" "I haven't." "When will you be playing next?" "I don't.") Nilsson acquired a manager, who steered him into a handful of TV guest appearances, and a brief run of stage performances in Europe set up by RCA. He disliked the experiences he had, though, and decided to stick to the recording studio. He later admitted it was a huge mistake on his part.

One Monday morning Nilsson answered his phone, and the caller turned out to be John Lennon, who praised Pandemonium Shadow Show, which he had listened to in a 36-hour marathon. Paul McCartney called the following Monday, also expressing his admiration. Nilsson was disappointed that his next Monday did not come with a call from Ringo Starr or George Harrison, but shortly after a message came, inviting him to London to meet the Beatles, watch them at work, and possibly sign with Apple Corps.

Pandemonium Shadow Show was followed in 1968 by Aerial Ballet, an album that included Nilsson's rendition of Fred Neil's song "Everybody's Talkin'". A minor hit at the time of release, the song would become extremely popular a year later when it was featured in the film Midnight Cowboy, and it would earn Nilsson his first Grammy Award. Aerial Ballet also contained Nilsson's version of his own composition, "One", which was later taken to the top of the charts by Three Dog Night. Nilsson was also commissioned at this time to write and perform the theme song for the ABC television series The Courtship of Eddie's Father. The result, "Best Friend", was very popular, but Nilsson never released the song on record.

Chart success Nilsson's next album, Harry (1969), was his first to hit the charts, and also provided a Top 40 single with "I Guess the Lord Must Be in New York City" (written as a contender for the theme to Midnight Cowboy). While the album still presented Nilsson as primarily a songwriter, his astute choice of cover material included, this time, a song by a little-known composer named Randy Newman, "Simon Smith and the Amazing Dancing Bear". Nilsson was so impressed with Newman's talent that he devoted his entire next album to Newman compositions, with Newman himself playing piano behind Nilsson's multi-tracked vocals. The result, Nilsson Sings Newman (1970), was commercially disappointing but was named Record of the Year by Stereo Review magazine and provided momentum to Newman's career.

Nilsson's next project was an animated film, The Point!, created with animation director Fred Wolf, and broadcast on ABC television in 1971. Nilsson's album of songs from The Point! was well-received, and it spawned a hit single, "Me and My Arrow".

Later that year, Nilsson went to England with producer Richard Perry to record what became the most successful album of his career. Nilsson Schmilsson yielded three very stylistically different hit singles. The first was a cover of Badfinger's song "Without You", featuring a highly emotional arrangement and soaring vocals to match, a performance that was rewarded with Nilsson's second Grammy Award. The second single was "Coconut", a novelty calypso number featuring three characters (the narrator, the sister, and the doctor) all sung in different voices by Nilsson. The song is best remembered for its chorus lyric, "Put de lime in de coconut, and drink 'em both up." This song has since been featured in many other films, commercials, and even an episode of The Simpsons. Most recently it has been heard in a television commercial for Coca Cola Lime. The third single, "Jump Into the Fire", was raucous, screaming rock and roll, including a drum solo by Derek and the Dominos' Jim Gordon and a bass detuning by Herbie Flowers. The song was famously used during the May 11th, 1980 scenes in the film Goodfellas.

Nilsson followed quickly with Son of Schmilsson (1972), released while its predecessor was still on the charts. Besides the problem of competing with himself, Nilsson's decision to give free rein to his bawdiness and bluntness on this release alienated some of his earlier, more conservative fan base. With lyrics like "I sang my balls off for you, baby", "Roll the world over / And give her a kiss and a feel", and the notorious "You're breaking my heart / You're tearing it apart / So f**k you", Nilsson had traveled far afield from his earlier work. Still, the album did well, and the single "Spaceman" was a Top 40 hit.

The Maverick This disregard for commercialism in favor of artistic satisfaction showed itself in Nilsson's next release, A Little Touch of Schmilsson in the Night (1973). Performing a selection of pop standards by the likes of Irving Berlin and Kalmar & Ruby, Nilsson sang in front of an orchestra arranged and conducted by veteran Gordon Jenkins in sessions produced by his constant supporter Derek Taylor. While in hindsight, the sessions showcased an extremely talented singer in one of his best performances, this was not the sort of thing that was going to burn up the charts in the 1970s. The session was filmed, and was broadcast as a television special by the BBC in the UK (Nilsson fans still await this film's release in some home video format).

1974 found Nilsson back in California, and when John Lennon moved there during his separation from Yoko Ono, the two musicians rekindled their earlier friendship. Lennon was intent upon producing Nilsson's next album, much to Nilsson's delight. However, their time together in California became known much more for heavy drinking and drug use than it did for musical collaboration. In a widely publicized incident, they were ejected from the Troubadour nightclub in West Hollywood for drunken heckling of the Smothers Brothers. To make matters worse, Nilsson ruptured a vocal cord during the sessions for this album, but he hid the injury due to fear that Lennon would call a halt to the production. The resulting album, Pussy Cats, which may charitably be described as 'uneven', was a shock for listeners who knew Nilsson as one of the best singers of his generation.