Born and raised in Toronto, Ontario, Candy was of three-quarters Scottish and one-quarter Polish descent. He played a featured supporting role (together with Rick Moranis) on Peter Gzowski's short-lived late night television talk show, 'Ninety Minutes Live', in 1976, and a member of Toronto's The Second City comedy troupe, gaining wide North American popularity when, in 1976, he became a cast member on the influential Toronto-based T.V. comedy-variety show Second City Television (S.C.T.V.).

From there, Candy went on to star in such Hollywood films as Stripes, Splash, Planes, Trains & Automobiles, Spaceballs, Brewster's Millions and Uncle Buck. He typically played characters who, whilst they lived somewhat seedy lives, often had their hearts in the right place. Candy was lauded by some as a true comic genius and this lay in his ability to portray an 'everyman', with which the audience could identify. Candy also moved into dramatic roles by appearing in films like JFK in a very effective role as a shady fatcat lawyer from the south and The Silent Partner.

In the 1980s, Candy also appeared in an HBO spoof documentary titled The Canadian Conspiracy about the supposed subversion of the United States by Canadian-born media personalities.

Candy starred in a short-lived animated series in 1989 entitled Camp Candy. The show, which was broadcast on Saturday mornings and was set in a fictional summer camp run by Candy, also featured his children Jennifer and Christopher Candy in supporting roles. The animated series also spawned a brief comic book series, based on the show and again starring Candy, also entitled Camp Candy. It was published by Marvel Comics' Star Comics imprint.

In the early 1990s, Candy returned to animation to record a voice for the T.V. film The Magic 7. However, this film remained in production for a very long time, due to animation difficulties and production delays. It was shelved for some time, but is now due to be released in 2006, more than 10 years after the actor's death.

John Candy died of a heart attack in his sleep at the age of 43 during filming on location in Durango, Mexico, for the motion picture Wagons East.It was found that one of the arteries in John's heart was completely blocked and this was the cause of the heart attack. Which was a shame because he had quit smoking at the time and was losing weight, fellow cast and crew even commented on him looking healthier than ever. He had previously been warned by doctors to lose weight due to a genetic predisposition to heart disease, from which his father had died at the age of 35; he refused, reportedly stating that his portly frame was what gave him his film roles.

He is survived by his widow, the former Rosemary Margaret Hoban, whom he married in 1979, and their two children.

His funeral Mass, held at St. Michael's Cathedral, was broadcast live, on television, across Canada. He is interred in the Holy Cross Cemetery, Culver City, California.

He is an inductee of Canada's Walk of Fame.