Baker was born in Liverpool, to a poor Roman Catholic family, and left school to become a novice monk. He remained in the monastic life for six years, but left and went into the Merchant Navy, at the same time taking up acting, at first as a hobby. In 1971, he got his first big break with the role of Rasputin in the film Nicholas and Alexandra.
In 1974, Baker took on the role of the Doctor from Jon Pertwee, and quickly made it his own. His eccentric style of dress, particularly with his trademark long scarf, and speech made him an immediately recognisable figure, and the viewing public quickly forgot his predecessors. He remained in the role for longer than any of them, and his decision to move on was regretted by many of the programme's fans.
Prior to leaving Doctor Who, he had married, as his second wife, his co-star Lalla Ward, but they divorced after 16 months.
Baker's subsequent career was relatively unmemorable. He played character parts on television and radio (most notably the Elizabethan sea captain in Blackadder), but became mostly known for doing advertising voiceovers. In the late 1990s he had a recurring role in the revival of Randall and Hopkirk (Deceased). His distinctive voice has become a gift for impressionists, and he is regularly impersonated in the popular comedy series Dead Ringers. He had a part in the 2001 BBC Radio 4 version of The Thirty-Nine Steps as Sir Walter Bullivant.
Also a talented writer, Baker created a short fairytale-style novel titled The Boy Who Kicked Pigs, which has been described as "A Grotesque Masterpiece". He has also written an autobiography, entitled Who on Earth is Tom Baker.