Rudd was born in Passaic, New Jersey, the son of Jewish immigrants from England; his family's original surname was "Rudnitzky". His father Michael was a historical tour guide who was formerly the vice president of World Airways, while Rudd's mother, Gloria, was a sales manager at television station KSMO-TV. He was raised in Overland Park, Kansas. He attended high school at Shawnee Mission West and college at the University of Kansas, where he was a member of Sigma Nu fraternity.
Rudd made his breakout performance in the 1995 film Clueless. Additional credits include Wet Hot American Summer, Halloween: The Curse of Michael Myers, The Cider House Rules, Anchorman: The Legend of Ron Burgundy, William Shakespeare's Romeo + Juliet, Friends (in the recurring role of Mike Hannigan, who married Phoebe Buffay in 2004), The Object of My Affection, and The 40-Year-Old Virgin. While he played the original Josh in Clueless, he returned to play the character of Sonny when the movie was adapted into a television show in 1996. Rudd's Broadway credits include The Last Night of Ballyhoo (1997), Twelfth Night (1998), and Three Days of Rain (2006). He guest-starred as a has-been 1990s rock star, Desmond Fellows, on the television series, Veronica Mars, in an episode titled "Debasement Tapes". He has also appeared in the audiobook recording of John Hodgman's book The Areas of My Expertise.
In 2006, he appeared in several episodes of Reno 911! as "Guy Gerricault" (pronounced "jericho"), the coach of a lamaze class, and portrayed a drug lord in the film Reno 911!: Miami. In 2007, he appeared in the films Knocked Up (his third collaboration with Judd Apatow and Seth Rogen), and The Ten (which reunites him with frequent collaborators David Wain and Michael Showalter). The same year, Rudd provided his voice for the narration of the HBO/NFL Films series Hard Knocks: Training Camp With The Kansas City Chiefs. In 2008, Rudd starred in Over Her Dead Body opposite Eva Longoria, the direct-to-video release I Could Never Be Your Woman opposite Michelle Pfeiffer (reuniting him with Clueless director Amy Heckerling), Forgetting Sarah Marshall, and Role Models. He also appeared on Little Britain USA as the French President. In 2009, he starred in I Love You, Man with Jason Segel.
In 2003, he married his girlfriend of five years, Julie Yaeger. In 2005, their son Jack was born. Although they live in Manhattan, Rudd frequently travels to Los Angeles if he is shooting a movie, and Overland Park, Kansas where he went to high school. He is a fan of the National Football League's Kansas City Chiefs, for whom he narrated the HBO special Hard Knocks in 2007.