He was the inspiration for Sheridan Whiteside, the main character in the play The Man Who Came to Dinner (1939) by George S. Kaufman and Moss Hart, and for the far less likable character Waldo Lydecker in the classic film Laura (1944). He claimed to be the inspiration for Rex Stout's brilliant detective Nero Wolfe, but Stout, although he was friendly to Woollcott, said there was nothing to that idea.

Woollcott's review of the Marx Brothers' Broadway debut, I'll Say She Is, helped the group's career from mere success to superstardom and started a life-long friendship with Harpo Marx. Harpo's two adopted sons, William (Bill) Woollcott Marx and Alexander Marx, are named after Aleck and his brother Billy Woollcott.

Nicknamed Aleck, Woollcott was born near Red Bank, New Jersey, and graduated from Hamilton College in Clinton, New York. In his early twenties he contracted the mumps, which apparently left him mostly, if not completely, impotent. He never married or had children, although he had a large number of female friends, most notable of whom were Dorothy Parker and Neysa McMein, to whom he actually proposed the day after she had just wed her new husband, Jack Baragwanath. (Once Wollcott told McMein that “I’m thinking of writing the story of our life together. The title is already settled.” McMein: “What is it?” Woollcott: “Under Separate Cover.”)

Woollcott was born in an 85-room house, a vast ramshackle building that had once been a commune. It was called The North American Phalanx, and was in Phalanx, New Jersey. There were many social experiments in the mid-1800s, some more successful than others. When The Phalanx fell apart after a fire there in 1854, it was taken over by the Bucklin family, Woollcott's maternal grandparents. There, amid his extended family, Woollcott spent large portions of his childhood. His father was a ne'er-do-well Cockney who drifted through various jobs, sometimes spending long periods away from his wife and children. Poverty was always close at hand.

The Bucklins and Woollcotts were avid readers, giving young Aleck a lifelong love of literature, especially the works of Charles Dickens. Through a family friend, Dr. Alexander Humphreys (after whom he was named), Woollcott made his way through college, graduating from Hamilton College, in upstate New York, in 1909. There, despite a rather poor reputation (his nickname was "Putrid") he founded a drama group, edited the student literary magazine, and was accepted by a fraternity.

He was one of the most prolific drama critics at The New York Times and was an owlish character whose caustic wit either joyously attracted or vehemently repelled the artistic communities of 1920s Manhattan. He was banned for a time from reviewing certain Broadway theater shows. As a result he sued the Shubert theater organization for violation of the New York Civil Rights Act, but lost in the state's highest court in 1916 on the grounds that only discrimination on the basis of race, creed or color was unlawful. From 1929 to 1934 Woollcott wrote a column called "Shouts and Murmurs" for The New Yorker. He was frequently criticized for his ornate, florid style of writing and, in contrast to his contemporaries James Thurber and S. J. Perelman, he is little read today, although his book, While Rome Burns, published by Grosset & Dunlap in 1934, was in 1954 named by critic Vincent Starrett as one of the 52 "Best Loved Books of the Twentieth Century".

Billed as The Early Bookworm, Woollcott was first heard on CBS radio in October 1929, reviewing books in various timeslots until 1933. His CBS show The Town Crier, which began July 21, 1933, opened with the ringing of a bell and the cry, "Hear ye, hear ye!", followed by Woollcott's literary observations punctuated with acidic anecdotes. Sponsored by Cream of Wheat (1934-35) and Grainger Tobacco (1937-38), it continued until January 6, 1938. He had no reservations about using this forum to promote his own books, and the continual mentions of his While Rome Burns (1934) made it a bestseller.

He was one of the most quoted men of his generation. Among Woollcott's classics is his description of the Los Angeles area as "Seven suburbs in search of a city" — a quip often attributed to his friend Dorothy Parker. Describing The New Yorker editor Harold Ross, he said: "He looks like a dishonest Abe Lincoln." He claimed the Brandy Alexander cocktail was named for him.

Woollcott was renowned for his savage tongue. He dismissed a notable wit and pianist: "There is absolutely nothing wrong with Oscar Levant that a miracle can't fix." He greeted friends: "Hello, Repulsive." He submitted the shortest theatrical review in history: in his review of the Broadway show Wham!, he simply wrote "Ouch." When a waiter asked him to repeat his order, he demanded "muffins filled with pus."

His judgments were frequently eccentric. Dorothy Parker once said: "I remember hearing Woollcott say reading Proust is like lying in someone else's dirty bath water. And then he'd go into ecstasy about something called, Valiant Is the Word for Carrie, and I knew I had enough of the Round Table."