Reed was born on October 2, 1938, in Fort Worth, Texas, the son of Jewell (née Smith) and James M. Reed, an oil company supervisor. In an interview with The New York Times, Reed stated: “My mother came from a family of 10 in Oklahoma, her second cousins were the Dalton Gang,” he said. “And when my grandfather was a little boy, he was rocked by Jesse James on his knee.”

He earned his journalism degree from Louisiana State University in 1960. There, he began writing film and play reviews, not only for the university’s newspaper, The Daily Reveille, but also for the Baton Rouge newspaper, The Morning Advocate. He moved to New York City after graduating from LSU, hoping to find success as an actor. Instead, he was hired to work at the publicity department of 20th Century Fox. In 1969, he said his job there was to “write those puffy things about Elvis Presley and—you know—Fabian, and tell everybody how great they were when I wouldn’t be caught dead seeing their movies myself. […] Cleopatra came along and rocked the company financially. We were saving on rubber bands and paying Elizabeth Taylor and Richard Burton to float down the Nile while everybody back at Fox was taking salary cuts, and I was the first one to go—the little guy at the $75 salary, the most dispensable item in the company. I was fired.” Later in the decade, he provided many interviews for The New York Times and New York, which at the time was the Sunday magazine of the New York Herald Tribune. In 1966, the year in which the Herald Tribune folded, he was hired as one of the music critics for HiFi/Stereo Review (now Sound & Vision), a position at which he remained until early 1973.

Reed lives in a two-bedroom apartment at The Dakota apartment building in New York City, which he bought for $30,000 in 1969.

Reed has acted occasionally, such as in the movie version of Gore Vidal’s Myra Breckinridge (1970). Reed also appeared in the films Superman (1978, as himself), Inchon (1981) and Irreconcilable Differences (1984). He appeared frequently as a judge on the TV game show The Gong Show in the late 1970s. Reed additionally served on the jury at the 21st Berlin International Film Festival in 1971, and guest-voiced as himself on the animated series The Critic.

After Marisa Tomei won an Oscar for Best Supporting Actress in 1992 for her work in My Cousin Vinny, Reed said publicly that she had not actually won the award and that presenter Jack Palance had accidentally read the wrong name off of the card he was reading. When it was pointed out that the card only had one name on it, Reed changed his theory to say that Palance had actually read the wrong name off the Teleprompter and claimed that the Academy went along with it because they would have been embarrassed to admit that mistake in front of a huge viewing audience. Reed was publicly rebutted by the accounting firm Price Waterhouse, who said that if a presenter ever announced the wrong winner a PwC representative would go on stage and state that the wrong result had been announced and then either state the correct result himself or give the information to someone on stage to correct it. Roger Ebert said that Reed’s conspiracy theories were false and unfair to Tomei and that Reed owed her an apology.

In February 2000, Reed was arrested for shoplifting after leaving a Tower Records in Manhattan with compact discs by Mel Tormé, Peggy Lee, and Carmen McRae in his jacket pockets. Reed, who had just purchased two other CDs, says he forgot about the other three CDs and his offer to pay for them was refused. The charges were later dropped. According to Reed, several days after the arrest Peggy Lee sent him her entire catalog of CDs, because “she was so thrilled I wanted one of her CDs enough to put myself through so much hell”.

In a 2005 review of the South Korean movie Oldboy, Reed wrote:

Rex Reed appears in the 2009 documentary For the Love of Movies: The Story of American Film Criticism explaining how important film critics were in the 1970s, and complaining about the proliferation of unqualified critical voices on the Internet.

Reed’s 2012 review for The Cabin in the Woods contained significant factual inaccuracies in his summary of the film, and exhibited a dismissive attitude towards anyone who disagreed with his negative opinion. L Magazine’s Henry Stewart noted: “his review is literally about 50 percent inaccurate—factually, objectively wrong.” His professionalism was also called into question when, in addition to the factual inaccuracies, many felt he was needlessly insulting and mean-spirited towards those who enjoyed the film.

In a 2013 review of Identity Thief, Reed made several references to Melissa McCarthy’s weight, referring to her as “tractor-sized”, “humongous”, “obese”, and a “hippo”. Film critic Richard Roeper said, “This just smacks of mean-spirited name-calling in lieu of genuine criticism.” The review was referenced at the 85th Academy Awards on February 24, 2013, by the host, Seth MacFarlane, who joked that Reed would review Adele for singing “Skyfall” at the ceremony. In a column for The Huffington Post, Candy Spelling likened Reed’s review to bullying. Reed stood by his comments and stated his objection to the use of serious health issue such as obesity as comedy talking points. He dismissed the outrage as being orchestrated for publicity, but praised McCarthy for not getting involved in the matter, calling her “completely classy”.

In 2013, Reed reviewed V/H/S/2, despite walking out of the film within its first 20 minutes. As a result, his review was brief and incorrectly summarized Jason Eisener’s segment of the horror anthology. Many felt that Reed was unprofessional, with journalist Sam Adams stating that Reed was “making a mockery of a noble profession while intelligent critics scramble for crumbs all around him”.

In 2016, Reed published a review of The Whole Truth in which he obsesses over star Renée Zellweger’s face. He wrote

In a 2017 review of The Shape of Water, he referred to people with disabilities as “defective creatures” and Sally Hawkins’ mute character as “mentally handicapped”.

In 2017, Reed’s review of The Shape of Water mistook the film’s writer and director Guillermo del Toro for actor Benicio del Toro (the two are not related; he also misspelled Benicio as Benecio). Reed’s review was criticized and ridiculed for referring to Hawkins’ mute character as “mentally handicapped” and for erroneously crediting Benicio del Toro as the film’s director. Reed also described Guillermo del Toro’s native country as Spain, despite him coming from Mexico, and Benicio del Toro himself coming from Puerto Rico.