Carter was born in St. Petersburg, Florida. He was an avid reader of science fiction and fantasy in his youth, and became broadly knowledgeable in both fields. He was also active in fandom.
Carter served in the United States Army (infantry, Korea, 1951–53), and then attended Columbia University and took part in Leonie Adams's Poetry Workshop (1953–54). He was an advertising and publishers' copywriter from 1957 until 1969, when he took up writing full-time. He was also an editorial consultant. During much of his writing career he lived in Hollis, New York.
Carter was married twice, first to Judith Ellen Hershkovitz (married 1959, divorced 1960) and second to Noel Vreeland (married 1963, when they were both working for the publisher Prentice-Hall; divorced 1975).
Carter was a member of the Trap Door Spiders, an all-male literary banqueting club which served as the basis of Isaac Asimov's fictional group of mystery-solvers, the Black Widowers. Carter was the model for Asimov's character Mario Gonzalo. Carter was also a member of the Swordsmen and Sorcerers' Guild of America (SAGA), a loose-knit group of Heroic fantasy authors founded in the 1960s, some of whose work he anthologized in the Flashing Swords! series.
In the 1970s Carter published one issue of his own fantasy fanzine Kadath, named after H. P. Lovecraft's fictional setting (see The Dream-Quest of Unknown Kadath). It was printed in extremely low numbers and was scarcely circulated. It contained Carter's Cthulhu Mythos story "The City of Pillars" (pp. 22–25).
Carter resided in East Orange, New Jersey, in his later years, and drank and smoked heavily. It was probably smoking that gave him oral cancer in 1985. Only his status as a Korean War veteran enabled him to receive extensive surgery. However, it failed to cure the cancer and left him disfigured.
In the last year before his death, he had begun to reappear in print with a new book in his Terra Magica series, a long-promised Prince Zarkon pulp hero pastiche, Horror Wears Blue, and a regular column for the magazine Crypt of Cthulhu. Despite these successes, Carter increased his alcohol intake, becoming an alcoholic. His cancer resurfaced, spreading to his throat and leading to his death in Montclair, New Jersey, in 1988.
Robert M. Price, the editor of Crypt of Cthulhu, who had published a Lin Carter special issue (Vol. 5, No 2, whole number 36, Yuletide 1985), was preparing a second all-Carter issue when Carter died. It was turned into a memorial issue (Vol. 7, No 4, whole number 54, Eastertide 1988). Two further issues of the magazine were devoted to Carter alone (see References below). Price was also appointed Carter's literary executor.