Ethan Phillips was born and raised in Long Island, New York. Phillips graduated with a degree in English Literature from Boston University and a Masters Degree in Fine Arts from Cornell University. He began his on-screen acting career playing Pete John Downey on the hit television series Benson. Although the series began airing in 1979, Phillips did not join the series until the following year. Also joining the series in that year was Rene Auberjonois, who later starred as Odo on Star Trek: Deep Space Nine.

Phillips and Auberjonois co-starred together on Benson until 1985, when Phillips left the series. While still acting on the show, Phillips made his feature film debut with a small role in the acclaimed 1981 drama Ragtime. Starring in this film was Phillips' future Voyager co-star Brad Dourif (Lon Suder). Robert Joy also had a supporting role in the film.

After leaving Benson, Phillips began to make a major transition towards films. He had a supporting role in the popular 1986 horror movie Critters with Scott Grimes, and the following year, he appeared in the comedy Burglar, starring Whoopi Goldberg. He appeared in three films in 1989: the highly-acclaimed Lean on Me (also featuring Tony Todd and Mike Starr), the romantic comedy Bloodhounds of Broadway (co-starring Googy Gress, Stephen McHattie and Alan Ruck), and the Oscar-winning historical war drama Glory (with Bob Gunton, Cliff DeYoung, Richard Riehle, and Mark Margolis).

Phillips continued to appear on television, however. In 1987, he co-starred with Lance LeGault and Raphael Sbarge in the pilot episode of the short-lived series Werewolf. He also appeared on a number of other TV shows throughout the late 1980s, including an episode of The Twilight Zone with Christopher Carroll.