Chaykin was born in Brooklyn, New York. His father, Irving J. Chaykin (1912–2007), was born in Brooklyn, and was an esteemed professor of accountancy at City College of New York. His mother, Clarice Chaykin (née Bloomfield), was born in Winnipeg, then moved to Montreal at the age of three. She graduated from Beth Israel Hospital nursing school in Newark, New Jersey, before her marriage. Chaykin's uncle, George Bloomfield, is a prolific Canadian director-writer-producer.

Raised in New York City, Chaykin studied drama at the State University of New York at Buffalo. He subsequently moved to Toronto, Ontario, where he has resided ever since. He is married to actress Susannah Hoffmann, with whom he has one daughter.

A large man, Chaykin is known for portrayals of blustery supporting characters. One of his rare leading roles is as Nero Wolfe. Chaykin first played the detective genius in The Golden Spiders: A Nero Wolfe Mystery (2000), an A&E telemovie adaptation of the 1953 novel by Rex Stout. Timothy Hutton costars as Archie Goodwin. The New York Times reported Chaykin's "undisguised delight" at starring in the promotion for The Golden Spiders: "There's an extraordinary billboard up on Sunset Boulevard right now, with a humongous photograph of my face. ... I drive by it constantly, back and forth, back and forth." The original movie's success led to the weekly series, A Nero Wolfe Mystery, which played for two seasons on A&E and continues to air internationally. Chaykin's first starring role came in Whale Music, a 1994 film in which he played a burned-out rock star, a character based largely on Brian Wilson. Chaykin was named Best Actor at the 15th Genie Awards for his portrayal.

Two of Chaykin's early motion picture roles brought him public recognition. He portrayed young computer programmer Jim Sting in WarGames; and as prosecution witness Sam Tipton in My Cousin Vinny, he successfully voiced a Southern accent ("No self-respectin' Southerner uses instant grits").

Chaykin has also had television roles in the series Seeing Things and Emily of New Moon, and a recurring role as the intergalactic gourmand Nerus (a nod to Nero Wolfe) in Stargate SG-1. In 1990, he had a small but pivotal role in the film Dances with Wolves. He portrayed the bizarre, Major Fambrough. Fambrough can only scribble 1st Lt. Dunbar's orders, returns a salute in a non-regulation way and discloses he urinated in his uniform trousers. After Dunbar's departure, he dies from a self-inflicted gunshot wound using an 1858 Army .44 caliber Revolver. He portrayed the colorful bookie Frank Perlin opposite Philip Seymour Hoffman's compulsive gambler Dan Mahowny in Owning Mahowny, a film that critic Roger Ebert named as one of the ten best of 2003.

In 2006, Chaykin appeared in an episode of the Ken Finkleman miniseries, At the Hotel. He received a Gemini Award for best performance by an actor in a guest role. He has a semi-recurring role in the HBO series Entourage, as volatile movie producer Harvey Weingard, a send-up of the celebrated producer Harvey Weinstein. He also appeared as Stan Deane, father of Kevin Zegers' character Woody Deane, in the 2006 romantic comedy It's a Boy Girl Thing.

To celebrate the first 30 years of his career, the Chlotrudis Society for Independent Film presented Chaykin with its Career So Far Award in 2006. Chaykin spoke to the Toronto Star about the honor: