Fernández was born in San Pedro de Macorís, Dominican Republic, of Haitian descent. He was first scouted by the Toronto Blue Jays’ Latin America scout Epy Guerrero and was signed as an undrafted free agent in 1979.

Promoted to the Blue Jays in 1983, Fernández became the team’s full-time shortstop in 1985, and contributed significantly to the team winning its first division title that year. Fernández continued to star for the Jays for several years afterwards. His 213 hits in 1986 were, at the time, a major league single-season record for a shortstop.

Before the 1991 season, Fernández was traded to the San Diego Padres in a deal that also sent Jays star Fred McGriff to San Diego in exchange for Roberto Alomar and Joe Carter. Fernández played for San Diego for two years. After the 1992 season, the Padres traded him to the New York Mets for D. J. Dozier, Wally Whitehurst, and a player to be named later. After a disappointing start to the 1993 season, the Mets traded him back to the Blue Jays for Darrin Jackson. He played well for the remainder of the season and was instrumental in helping the Blue Jays win the 1993 World Series against the Philadelphia Phillies. In that World Series, Fernández drove in nine runs, a record for a shortstop.

Before the 1995 season, Fernández signed a two-year contract with the New York Yankees. It was because of an injury early in the season to Fernández that Derek Jeter was called up to the major leagues for the first time. Fernández injured his elbow during spring training in 1996, and missed the entire season.

Fernández was awarded four consecutive Gold Glove Awards for his defense, from 1986 to 1989. Fernández was also named to five All-Star teams. He finished his career with a .288 batting average in 2,158 games played, and batted .327 in postseason play. Fernandez hit for the cycle as a New York Yankee on September 3, 1995, against the Oakland Athletics. He set a nine-year record for shortstops with a .992 fielding percentage in 1989, while still holding the single-season fielding percentage record for third basemen with .991 in 1994.

Fernández signed with the Cleveland Indians for the 1997 season. Thanks in large part to his own game-winning home run against Baltimore in the American League Championship Series—the only 1–0 game in MLB postseason history with an extra-innings home run—he played in the 1997 World Series with the Indians. In Game 7 of the World Series against the Florida Marlins, Fernández hit a two-run single in the top of the third inning for the Indians’ only runs of the game, and was in position to be credited with the Series-winning hit for Cleveland, had they won the game. However, in the bottom of the 11th inning, Fernández committed an error on a potential double play ball while playing at second base, and the eventual World Series-winning run was put on base as a result.

In 1998, he rejoined the Blue Jays, and revitalized his hitting, batting over .300 in two seasons there. In 2000, Fernández played for the Seibu Lions in Japan before returning to the majors the following year. When he returned in 2001, he briefly played for the Milwaukee Brewers but returned to Toronto late in the season, and retired at its conclusion.

On October 17, 2016, Fernandez was inducted into the Ontario Sports Hall of Fame at the Sheraton Centre Toronto Hotel, where he thanked the fans in Toronto, Ontario and in Canada for embracing him.

Fernández announced in 2017 he had been diagnosed with polycystic kidney disease. On February 15, 2020, he died at a hospital in Weston, Florida following complications with a stroke, pneumonia, and an induced coma.