Born in Los Angeles, California, Lahr holds a B.A. from Yale University and a Master's degree from Worcester College, Oxford. He has written many books, including three biographies of important theatrical figures: one of his father called Notes on a Cowardly Lion; one of the British playwright Joe Orton called Prick Up Your Ears; and one of the Australian comedian Barry Humphries called Dame Edna Everage and the Rise of Western Civilization: Backstage with Barry Humphries. In 1987 he co-produced a film based on his Orton biography and with the same title. Lahr also wrote the foreword to Love All the People: Letters, Lyrics, Routines: a 1994 collection of Bill Hicks' work.
In 2002, Lahr became the first drama critic ever to win a Tony Award for his part in writing actress Elaine Stritch’s one–woman show, "Elaine Stritch at Liberty", for which he and Stritch also won the Drama Desk Award for the Best Book to a Musical. Among his many awards, Lahr has twice won the George Jean Nathan Award for Dramatic Criticism.
In 1994, Lahr published a profile in The New Yorker detailing the vagaries of Lady Maria St. Just, an executor of playwright Tennessee Williams's estate. The profile helped liberate Lyle Leverich's biography of Williams, Tom: The Unknown Tennessee Williams, from a four-year legal stranglehold. While working on a planned second volume in 2000, Leverich died and named Lahr as his favored successor. Lahr agreed to complete the second volume, which will follow Williams from 1945 to his death in 1983. In October 2007, Lahr said that he was taking a half-year sabbatical from writing New Yorker profiles to work on the biography, and stated, "I'll probably finish it when I'm in my seventies.