Hoffman was born in Fairport, New York to Gordon S. Hoffman, a former Xerox executive, and Marilyn O'Connor, a family court judge; he has a sister, Emily, and a brother, Gordy Hoffman, who scripted the 2002 film Love Liza, in which Philip starred. Hoffman has Irish heritage;[1] his father was Protestant and his mother was Catholic, but he was not raised heavily in either religion.[2] Hoffman's parents divorced when he was nine years old.[3]

Hoffman appeared in his high school production of Death of a Salesman, directed by Midge Marshall. Hoffman received a BFA in drama in 1989 from New York University's Tisch School of the Arts. Soon after graduating, he went to rehab for drug and alcohol addiction and was able to become sober.[4]

Hoffman is in a relationship with costume designer Mimi O'Donnell. They met while working on the 1999 play In Arabia We'd All Be Kings, which Hoffman directed. They have a son, Cooper Alexander, born in March 2003.[5] According to Us Weekly, they are expecting a second child in November 2006.[6]

One of Hoffman's earliest mainstream roles was as a defendant in a 1990 episode of the television series Law & Order. He made his film breakthrough in 1992 with Scent of a Woman as a backstabbing classmate to Chris O'Donnell. He later credited that film with kickstarting his film career, as he was stocking shelves at a city grocery at the time before landing the role. Hoffman has established a successful and respected film career playing diverse and idiosyncratic characters in supporting roles, working with a wide variety of noted directors, including Paul Thomas Anderson, The Coen Brothers, Cameron Crowe, Spike Lee, David Mamet, Todd Solondz and Anthony Minghella; notably, he has appeared in all four of Anderson's feature films to date (Hard Eight, Boogie Nights, Magnolia, and Punch-Drunk Love). He appeared in Last Party 2000, a documentary about the 2000 elections. He starred in Owning Mahowny in 2003 to strong reviews as a bank employee who embezzles money to feed his gambling addiction. He also appeared in Along Came Polly as Ben Stiller's crude has-been actor buddy.

In addition to his film career, Hoffman has been recognized for his work in theater. He has twice been nominated for a Tony Award: as Best Actor (Play) in 2000 for a revival of Sam Shepard's True West, and for Best Actor (Featured Role - Play) in 2003 for a revival of Eugene O'Neill's Long Day's Journey into Night. Hoffman has also distinguished himself as a director with off-Broadway projects such as Rebecca Gilman's The Glory of Living, and Stephen Adly Guirgis's Jesus Hopped the A Train and The Last Days of Judas Iscariot. Hoffman is co-artistic director of New York City's LAByrinth Theater Company, along with actor John Ortiz.

In 2005, Hoffman won widespread acclaim for his portrayal of writer Truman Capote in the film Capote. His performance received numerous high-profile accolades and awards, including the Academy Award for Best Actor, the Golden Globe Award for Best Actor - Motion Picture Drama, the Screen Actors Guild Award for Best Actor - Motion Picture, and the BAFTA Award for Best Actor in a Leading Role. In addition, he was also awarded Best Actor by at least 10 film critic associations, including the National Board of Review, Toronto Film Critics, and Los Angeles Film Critics.

Most recently, Hoffman has appeared as the primary antagonist in Mission: Impossible III, starring opposite Tom Cruise. Hoffman is rumored as being considered for the role of The Penguin in the upcoming sequel to Batman Begins.