De Camp was born in New York City, one of three sons of Lyon de Camp, a businessman in real estate and lumber, and Emma Beatrice Sprague. His maternal grandfather was the accountant, banker, pioneering Volapükist and Civil War veteran Charles Ezra Sprague. De Camp once noted that he rarely used pen-names, "partly because my own true name sounds more like a pseudonym than most pseudonyms do."
De Camp began his education at the Trinity School in New York, then spent ten years attending the Snyder School in North Carolina, a military-style institution. His stay at the Snyder School was an attempt by his parents, who were heavy-handed disciplinarians, to cure him of intellectual arrogance and lack of discipline. He was awkward and thin, an ineffective fighter, and suffered from bullying by his classmates. His experiences at the school taught him to develop a detached, analytical style considered cold by all but his closest friends, though he could, like his father, be disarming and funny in social situations. He would later recall these challenging childhood experiences in the semi-autobiographical story, Judgment Day (1955).
An aeronautical engineer by profession, De Camp conducted his undergraduate studies at the California Institute of Technology (where his roommate was at one point noted rocket fuel scientist John Drury Clark), and earned his Bachelor of Science degree from Caltech in Aeronautical Engineering 1930. He earned his Master of Science degree in Engineering from the Stevens Institute of Technology in 1933. De Camp was also a surveyor and an expert in patents.
His first job was with the Inventors Foundation, Inc. in Hoboken, N.J., which was taken over by The International Correspondence Schools. De Camp transferred to the Scranton, PA division. He was Principal of the School of Inventing and Patenting when he resigned in 1937. His first book Inventions and Their Management resulted and was published in July 1937.
On August 12, 1939, de Camp married Catherine Crook, with whom he collaborated on science fiction and nonfiction beginning in the 1960s.
During World War II, de Camp served as a researcher at the Philadelphia Naval Yard along with his fellow writers Isaac Asimov and Robert A. Heinlein. De Camp eventually rose to the rank of lieutenant commander in the U.S. Navy as a reserve officer.
De Camp was a member of the all-male literary and dining club the "Trap Door Spiders" in New York City, which served as the basis of Asimov's fictional group of mystery solvers the "Black Widowers." De Camp himself was the model for the character named "Geoffrey Avalon."
De Camp was a founding member of the Swordsmen and Sorcerers' Guild of America (SAGA), a loosely knit group of Heroic fantasy writers that was founded during the 1960s and led by Lin Carter, with entry by credentials as a fantasy writer alone.
The de Camps moved to Plano, Texas, in 1989, and Sprague de Camp died there on November 6, 2000, seven months after his wife, on what would have been her birthday, just three weeks before his own 93rd birthday. His ashes were inurned, together with hers, in the Arlington National Cemetery in Virginia.
De Camp's personal library of about 1,200 books was acquired for auction by Half Price Books in 2005. The collection included books inscribed by fellow writers, such as Isaac Asimov and Carl Sagan, as well as de Camp himself.