Daly was born in Mount Kisco, New York, and was raised in New Jersey. He graduated in 1989 from Ridgewood High School in Ridgewood, New Jersey, and then attended Ithaca College, where he received a bachelor's degree in drama.
During the late 1990s, Daly appeared frequently in sketches on Late Night with Conan O'Brien and lent his voice to Robert Smigel's "TV Funhouse" cartoons on Saturday Night Live.
When the Upright Citizens Brigade relocated to New York from Chicago in 1996, Daly was one of the first New Yorkers to study improvisation with the group and performed in many of the earliest shows produced by the UCB. He was a member of the long-form improvisation group The Swarm, which was assembled and directed by Amy Poehler.
After college, Daly moved to New York City, where he performed, along with Andy Secunda, in the Sketch comedy duo The Two Andys, which appeared at the 1999 Aspen Comedy Festival. He was also a part of the Mainstage company at Chicago City Limits as an improvisational actor.
In 2000, Daly joined the cast of MADtv. He was a featured player in the show's 6th season and returned as a full cast member the following season.
In 2004, Daly appeared in the movie Christmas with the Kranks as a shopper who is bribed by Jamie Lee Curtis' character Nora Krank into giving her a Christmas ham.
Daly does many different characters in his stand-up. In 2007, a character named "Jerry O'Hearn" was featured on the Comedy Death-Ray compilation album. In 2008, Daly released the critically acclaimed Nine Sweaters, a comedy album compiled from a nine-week residency at Comedy Death-Ray's Tuesday night shows, on AST Records.
Daly has appeared in numerous films, most notably as courtside announcer Dick Pepperfield in the 2008 film Semi-Pro starring Will Ferrell.
In 2009, he guest starred as Detective Dick Tracy in an episode of The Closer entitled "Tapped Out" and later reprised that role in an episode of Major Crimes.
In December 2010, Daly performed stand-up on The Benson Interruption on Comedy Central.
He had a small role in the 2011 film, Transformers: Dark of the Moon as a mailroom worker.
Daly has made a number of appearances on podcasts such as Comedy Bang! Bang!, Superego, How Did This Get Made?, improv4humans, WTF with Marc Maron, The Nerdist Podcast, and Never Not Funny. In 2014, he began hosting the limited-run Earwolf podcast The Andy Daly Podcast Pilot Project.
In 2016, he played Principal Dwight in Middle School: The Worst Years of My Life.
