He was born on July 8, 1965 in Ivoryton, Connecticut and is a graduate of the American Musical and Dramatic Academy. His brother, Chris Tergesen, is a music supervisor and music editor. Lee has been married three times and has been married to Yuko Otomo, an art therapist, since 2011. They have a daughter, Lily, born in 2012.

While working as a waiter, he did his first stage work in New York. He landed his first major movie parts in Point Break (1991), Wayne's World (1992) and Wayne's World 2 (1993). In 1993, he played a recurring character, Chris Thormann, on Homicide: Life on the Street (1993). Next year, he got a starring role as Chett Donnelly on Weird Science (1994), which lasted until 1998. In 1997, he got another starring tv role on HBO's Oz (1997), as Tobias Beecher. It lasted until 2003.

Since Oz, he has appeared mostly on tv. He has had recurring or starring roles on Rescue Me (2004), Wanted (2005), Desperate Housewives (2004), Generation Kill (2008), Army Wives (2007), The Big C (2010), Red Widow (2013), Longmire (2012), The Americans (2013), Alpha House (2013) and American Horror Story (2011). After the Wayne's World movies, he has appeared in movies like Shaft (2000), Monster (2003), The Forgotten (2004), The Texas Chainsaw Massacre: The Beginning (2006), Silver Tongues (2011), Red Tails (2012) and The Collection (2012).

Lee has also been busy in commercials. His "I love you, man!" line from Wayne's World (1992) was used by Budweiser in its beer commercials. Between 2003-2004, he provided the voice-over in Advil's commercials. Between 2011-2012, he provided the voice-over of TV commercials in Ally Bank's "People Sense" ad campaign.