Lou Diamond Phillips is of Filipino, Chinese, Spanish, Scottish and Irish heritage.

Phillips worked as an assistant director and instructor at the University of Texas at Arlington, where he also studied Drama, between 1983 - 1986. In 1982 he met Adam Roarke, of the Film Actors Lab (Arlington, Texas), who became an important figure in his life. At the Film Actors Lab he studied Film Acting Technique and later joined the team as an instructor.

He attended Flour Bluff High School, and briefly attended Del Mar College, in Corpus Christi, Texas.

Phillips' big break came with the starring role in 1987's La Bamba as doomed early rocker Ritchie Valens. Though the role garnered him laud from critics, he has since found it difficult to find another leading role in a big-budget Hollywood film. In 1988, he co-starred along Edward James Olmos in the inner-city high school drama, Stand and Deliver, as Angel Guzman, a wannabe cholo who is inspired by his maths teacher, Jaime Escalante, to challenge himself at calculus and along the road, creates a friendship with his teacher.

The first low budget film in which he starred in was called Trespasses. During the making of this film, he met Julie Cypher, an assistant director who would later become his wife. They later divorced.

He met Jennifer Tilly, to whom he was briefly engaged, although the two never married. He later married model Kelly Preston (not to be confused with John Travolta's actress wife of the same name). They had twin daughters. They separated in 2005 and their divorce is pending.

Phillips also plays on the World Poker Tour in the Hollywood Home games. He plays for the Sierra Canyon H.S. & Santa Suzanna Montessori charity.