Benjamin was born in New York City, New York, the son of a garment industry worker. He attended the High School of Performing Arts and graduated from Northwestern University where he was involved in many plays and studied in the Northwestern theater school.

He married actress Paula Prentiss on October 26, 1961 and they have two children. He and Prentiss appeared together in the short-lived television series He & She (1967-68), as well as the film Catch-22 (1970). In 1978, he starred in the ambitious, but short-lived, television series Quark.

Benjamin starred in 1969's Goodbye, Columbus, based on the novel by Philip Roth. After appearing with a star-studded cast in the 1970 Mike Nichols film version of another best-seller, Catch-22, he starred in Diary of a Mad Housewife, The Marriage of a Young Stockbroker and yet another film based on a famous Roth novel, 1972's Portnoy's Complaint, in the title role.

He played a sexually ambiguous murder suspect in The Last of Sheila (1973), a mystery conceived and co-scripted by Anthony Perkins and Stephen Sondheim. And in an imaginative Michael Crichton story that year, Westworld, Benjamin played a man vacationing as a make-believe cowboy in a theme park where he ends up being stalked by a robot gunslinger played by Yul Brynner, a variation of Brynner's iconic role in The Magnificent Seven.

Then he returned to comedy, with a supporting role as a harried theatrical agent in the Neil Simon hit The Sunshine Boys opposite Walter Matthau and George Burns and as Matthau's colleague at an ineptly run hospital in 1978's House Calls. Benjamin also played a frustrated fiance of a woman who falls for the vampire Count Dracula in the surprise box-office smash Love at First Bite (1979) starring George Hamilton and Susan Saint James.

On April 7, 1979, Benjamin hosted Saturday Night Live.

Turning to directing, Benjamin's first project was the 1982 hit comedy My Favorite Year, which brought an Oscar nomination to its star, Peter O'Toole. Benjamin went on to direct a number of Hollywood films, mainly comedies, including City Heat (1984) with Clint Eastwood and The Money Pit (1986) with Tom Hanks. He directed Cher in the 1990 film Mermaids.

The most recent film Benjamin has directed was 2006's A Little Thing Called Murder, based on a true story, which featured Judy Davis as a con artist and killer in cahoots with her son.

Benjamin's acting appearances have become less frequent. They include a small role in the Woody Allen 1997 comedy Deconstructing Harry. He directed and appeared in Marci X, a 2003 comedy starring Lisa Kudrow.

His most recent roles came in 2008's Henry Poole Is Here and the television series Pushing Daisies.