Born Joseph Lane to Irish American Catholic parents; he was named after his paternal uncle, a Jesuit priest. His father, Daniel Lane, was a truck driver and an aspiring tenor who died from alcoholism when Lane was 11; his mother, Nora, was a manic-depressive housewife. Lane attended Catholic schools, including Jesuit St. Peter's Preparatory High School where he was elected Best Actor in 1974, in Jersey City. He changed his name to Nathan after the character Nathan Detroit from the musical Guys and Dolls, in a revival of which he appeared with Peter Gallagher and Faith Prince.

Between choosing college or pursuing his acting career, Lane chose to go with the latter, saying that college was for people who didn't know what they wanted to do, while he did. He moved to New York City where, after a long struggle, his career began on Broadway, most notably in the first production of Terrence McNally's Lips Together, Teeth Apart.

His first large film role was supplying the voice of Timon in Disney's The Lion King. After spending much of the 1990s working on movies, which included the popular film The Birdcage which raised his profile, and earned him a Golden Globe nomination for Best Actor in a Motion Picture - Musical or Comedy, and as Michael J. Fox's miserable business partner in Life With Mikey. Lane won his first Tony Award for Best Performance by a Leading Actor in a Musical for the role of Pseudolus in the revival of "A Funny Thing Happened on the Way to the Forum". The role was originally played on Broadway by Zero Mostel who also won a Tony for his performance. Lane returned to Broadway in the hit musical The Producers for which he won his second Tony Award in the same category, playing the role of Max, which was also originated by Zero Mostel. He is openly gay, and was criticized by some gay activists for taking the role of a promiscuous heterosexual in the short-lived TV series Encore! Encore!, which also starred Glenne Headly and Dame Joan Plowright. He dismissed these critics as "old queens".

In 2004, Mr. Lane revised the book for and starred in The Frogs, Stephen Sondheim's musical adaptation of Aristophanes' The Frogs, at the Vivian Beaumont Theatre at Lincoln Center. The production also starred Roger Bart, Peter Bartlett, John Byner, Burke Moses, and Michael Siberry. Lane's first connection with the show came when he performed the leading role of Dionysos in a concert staging in honor of Sondheim's birthday. The concert was recorded on Nonesuch, and included Brian Stokes Mitchell and Davis Gaines. The 2004 production of the show contained 7 additional songs, and was recorded by PS Classics.

In October 2004 Lane assumed the lead role of 'Max Bialystock' in the London stage production of Mel Brooks' The Producers. He had already played the role during the show's New York run, and was a last-minute replacement for Richard Dreyfuss, who had dropped out of the London run during rehearsals, citing back problems. Lane himself was forced to retire in December 2004 for the same reason. [1] The play was a commercial success, and for his ten-week run Lane was paid £400,000; in February 2005 he won the Olivier Award for Best Actor in a Musical (the show itself also winning Best New Musical, with Conleth Hill winning Supporting Role in a Musical for his performance as "Roger DeBris", the "flamboyant" director who must play Adolf Hitler in the musical number "Springtime for Hitler". [2])

In 2005, Lane received a Best Actor - Comedy Golden Globe nomination for his role in the film version of The Producers.

Lane is occasionally incorrectly identified as being Jewish. In 1995, he was interviewed by journalist Toby Young while promoting The Birdcage. Young asked him if he was Jewish, and then if he was gay. In response to the former question, Lane paused for a long time and said "Yes, yes, what of it?" In response to the latter question, Lane stormed out of the interview.

In response to the misunderstanding, Lane has said: "I'm really an honorary Jew, you know, all the best people are. I really do feel Jewish, even though I'm a Catholic. The way the Church has been behaving, I'm happy to be Jewish. You know, I've played so many Jewish characters, it's been a great part of my life."

He was 21 when he told his mother he was gay. Her reply was: "I'd rather you were dead." Lane shot back: "I knew you'd understand."

There is currently a movement to petition the Committee of the "American Theatre Wing's Tony Awards" for a Lifetime Achievement Award For Nathan Lane.