He was born in Lansing, Michigan. His official film Bio claims that he went to Japan at the age of 17. However, this is inconsistent with an interview he gave in Aikido Magazine, in which he claimed to have given demonstrations in Japanese Deer Park (a former small amusement park in Southern California) in "the early 70s". Ray Van De Walker claims to have met Steven Segal at the Orange County Aikikai, a prominent aikido dojo, around 1974, where he was known as "Steve, who gives demos at Japanese Deer Park." It seems unlikely that a 17-year old, a minor in the U.S., would be allowed to emigrate to Asia.

Ray's memory of him may be worth nothing, "He would come to Wednesday night practice. He tended to wear some weird striped robe thing that Japanese Deer Park asked him to wear. In practice, when he threw me, I couldn't feel his hands, which means that he was very skillful at blending ki." In Japan, Seagal taught English, and studied zen, aikido, kendo, judo and karate. He is said to have become adept at all of them. At some time later, he opened a martial arts school in Japan, the first westerner to do so. At this time, he married Miyako Fujitani but eventually left for America without her, pretending that he was not married at all. In 1984, he wed former Days of Our Lives actress Adrienne La Russa, but annulled the marriage when news of his marriage to Miyako (and, by extension, his bigamy) came to light.

In an interview in November 1997 for the Shambala Sun, he claimed to have developed his life-long interest in zen originally through a study of acupuncture. He also claimed that several Tibetan lamas suffering from malnutrition and abuse were sent to him, and he helped establish a safe house for them.

At various points, Seagal has hinted that he has worked as a bounty hunter and a CIA operative, although he has later denied it.

His film bio says he was in Asia for about 15 years. He was definitely in the U.S. one or two years before 1988 when he was associated with his first movie, the police drama Above the Law. If he was in Southern California in 1973, then he may have spent as long as fourteen years in Asia. At some point he returned to the San Fernando Valley (the northern suburb of Los Angeles, California) and opened a dojo. His film bio says that at this time he was a fight coordinator to the movies, for Sean Connery, and Toshiro Mifune.

In the Aikido Magazine interview, he said he developed his film contacts through students at his dojo. He claims that the moment of truth in his career was when they attempted to relegate him to a lower-paid, minor role, and he insisted on being paid the same as Chuck Norris, because he had at least the same level of skill.

He worked as a bodyguard and martial-arts instructor for Kelly LeBrock, whom he later costarred with, and married, and then divorced. At some point, he became associated with agent Michael Ovitz. He also appears to have a professional relationship with producer Jules R. Nasso.

He is a practicing buddhist. In 1997 one of his teachers, His Holiness Penor Rinpoche proclaimed him a tulku, a reincarnation of a buddhist lama.

He maintains a ranch in Colorado.