After earning a bachelor’s degree from Indiana University Bloomington, Anspaugh moved to Aspen, Colorado, where he worked as a substitute teacher and ski instructor for several years. He then enrolled in the University of Southern California (USC) School of Cinematic Arts. His work as an associate producer on television films led to his producing and directing Hill Street Blues. He followed this with directing St. Elsewhere and Miami Vice before making his feature film directing debut with Hoosiers. Hoosiers, a nostalgic sports drama about a small-town team winning the state basketball title in 1952, was nominated for two Academy Awards. It was named best sports film of all time by USA Today and by ESPN’s expert panel and website users. Hoosiers also was named to the Library of Congress’ National Film Registry.

On the night of the world premiere of Hoosiers in 1986, Anspaugh was named a Sagamore of the Wabash. This is Indiana’s highest civilian honor, given to those who have rendered distinguished service to the state or governor. He was awarded Indiana’s Governor’s Arts Award in 1991. In 1996 he received Indiana University’s Thomas Hart Benton Mural Medallion for Distinguished Achievement. The Indiana Historical Society named Anspaugh an Indiana Living Legend in 2011. In 2013 Anspaugh was inducted into the Indiana Basketball Hall of Fame. He also received the Hall’s Silver Medal Award, given in recognition of contributions to Indiana high school basketball by someone other than a high school player or coach.

Born in Decatur, Indiana, to Lawrence (local photographer) and Marie Anspaugh, he has a younger sister, Jane. He was married from 1974 to 1988 to cruise line sales manager Tamara Kramer. They have a daughter, Vanessa. Anspaugh married Touched by an Angel actress Roma Downey on November 24, 1995. The couple had a daughter, Reilly Marie, on June 3, 1996. In 1997, Anspaugh was clinically depressed and was treated at a rehabilitation clinic, which ultimately led to a breakdown of his marriage. Downey filed for divorce in March 1998, with it being finalized later that year. After living in California for three decades, in June 2014 Anspaugh relocated to Bloomington, Indiana.

In spring 2015 Anspaugh taught a class at Indiana University in directing for film and TV.

In 2015, 2017, and 2019 he directed plays for the Bloomington Playwrights Project. In 2017 he directed the musical Spring Awakening at Ivy Tech Bloomington.