Albertson was born in Malden, Massachusetts, the son of Russian-born Jewish immigrants Flora (née Craft) and Leopold Albertson. His sister was actress Mabel Albertson. Albertson’s mother, a stock actress, supported the family by working in a shoe factory. Albertson dropped out of high school and traveled to New York City in an attempt to make it big in show business. He was too poor to get a room in a flophouse, so in the winter he would sleep on the IRT subway; he would catch the train for a nickel, and hide out when the transit workers would clear out the train at the end of the line. In the summer he slept in Central Park. Albertson’s first real job in show business was with a vaudeville road troupe, the Dancing Verselle Sisters.

Albertson worked in burlesque as a hoofer (soft shoe dancer) and straight man to Phil Silvers on the Minsky’s Burlesque Circuit. Besides vaudeville and burlesque, he appeared on the stage in many Broadway plays and musicals, including High Button Shoes, Top Banana, The Cradle Will Rock, Make Mine Manhattan, Show Boat, Boy Meets Girl, Girl Crazy, Meet the People, The Sunshine Boys (for which he received a Tony Award nomination for Best Actor), and The Subject Was Roses (for which he won a Tony for Best Supporting Actor). He was also known for two radio programs, Just Plain Bill and The Jack Albertson Comedy Show.

Albertson appeared in more than thirty films. He had an early minor role in Miracle on 34th Street as a postal worker who redirects dead letters addressed to “Santa Claus” to the courthouse where Kris Kringle is on trial. He won an Academy Award for Best Supporting Actor for his role in the 1968 film The Subject Was Roses. He later apologized to Jack Wild for winning the award; Wild was also nominated and Albertson expected Wild to win. Albertson appeared as Charlie Bucket’s Grandpa Joe in Willy Wonka & the Chocolate Factory (1971), and in The Poseidon Adventure (1972), where he played Manny Rosen, husband to Belle (played by Shelley Winters). Albertson said that his one regret was that he was not asked to reprise his role in the movie version of The Sunshine Boys.  Albertson was a radio performer and for a time a regular on the Milton Berle program in the late 1940s.

Throughout his career, Albertson appeared in many television series, such as CBS’s Hey, Jeannie! with Jeannie Carson; the syndicated western series Frontier Doctor with Rex Allen; Rod Cameron’s syndicated crime drama, State Trooper; and ABC’s 1961-1962 drama series, Bus Stop. He guest starred on the David Janssen crime drama series, Richard Diamond, Private Detective. From 1960 to 1961, Albertson was cast in three episodes of the CBS sitcom, Pete and Gladys, with Harry Morgan and Cara Williams.

On January 2, 1961, Albertson was cast as Sampson J. Binton, with DeForest Kelley as Alex Jeffords, in the series finale, “Listen to the Nightingale” of the NBC western series, Riverboat, starring Darren McGavin.  Albertson had a recurring role as the neighbor Walter Burton in eight episodes of the 1962 ABC sitcom, Room for One More, with Andrew Duggan and Peggy McCay. He had recurring roles in Dean Jones’s NBC military sitcom, Ensign O’Toole (1962–1963), and Jack Sheldon’s CBS sitcom, Run, Buddy, Run (1966).

Other 1960s series on which Albertson appeared were NBC’s sitcom, Happy starring Ronnie Burns, and CBS’s sitcom/drama Glynis, starring Glynis Johns and Keith Andes, which aired for thirteen weeks in the fall of 1963. Albertson also appeared in an episode of Rod Serling’s The Twilight Zone entitled “The Shelter” as Jerry Harlowe, the neighbor and best friend of physician Bill Stockton.

In a 1967 episode of CBS’s The Andy Griffith Show, he played the n’er-do-well, cousin Bradford J. Taylor, of series character Aunt Bee (Frances Bavier).  Albertson co-starred as “The Man” Ed Brown in NBC’s Chico and the Man, with Freddie Prinze, for which he won an Emmy. Albertson is one of the few entertainers to have won the triple crown of visual entertainment (a Tony, an Oscar, and an Emmy).

He resided for years in West Hollywood, California. In 1978, he was diagnosed with colorectal cancer, but kept this information private and continued to act. Two of his last roles were in the television movies, My Body, My Child (1982) and Grandpa, Will You Run With Me? (1983), both filmed in 1981 several months before his death, both of which were released posthumously.  Albertson died on 25 November 1981, aged 74, after a three-year illness. He and sister Mabel Albertson, who died ten months later, were cremated and their ashes were scattered in the Pacific Ocean.