Tergesen was born in Ivoryton, Connecticut and graduated from Valley Regional High School in nearby Deep River. He moved to New York at the age of 18 to try to become an actor. He graduated from the American Musical and Dramatic Academy (AMDA)'s two-year program in Manhattan, where, from 1986 to 1989, he worked at the Empire Diner. "I wasn't a great waiter. I was funny, but I gave a lot of attitude", he told Rosie Magazine in March 2002. He added: "The place is like a vortex for me". In 1989, the diner was where he met Tom Fontana, the Future creator of Oz, who lived around the corner from the diner. He did some stage work during this time. "I was doing plays all the time, but there's no money in it", Tergesen said in a 1995 Los Angeles Times article. "After graduation, I thought I'd be making a living at it." He went to Los Angeles to help Tom Fontana move house. While dining at a restaurant on the day after arriving in Los Angeles, California, a casting Director and friend of Fontana's asked Lee if he was an actor. "He told me there was a part in this movie and at that time, I couldn't imagine what it could be," Tergesen told the L.A. Times. The movie ended up being Point Break, starring Keanu Reeves and Patrick Swayze. "It was the beginning of me never having to do anything else but act", he told LT.com in 1990.
Tergesen began his career with a bit role in the 1991 prime-time aired pilot, Acting Sheriff. Tergesen then appeared in Wayne's World (1992) and Wayne's World 2 (1993), the 1994 series Weird Science, and a recurring role in the first season of Homicide: Life on the Street. Tergesen's career took off in 1997 with his critically acclaimed portrayal of Tobias Beecher on HBO's Oz, a role he played until the series ended in 2003. His film credits include Point Break, Shaft, Monster, The Forgotten, The Texas Chainsaw Massacre: The Beginning, Cast A Deadly Spell and Wild Iris. He has made several appearances in TV shows such as ER, Rescue Me, CSI: Crime Scene Investigation episode 517, Criminal Minds episode 511, The 4400, House, Law & Order and two of its spin-offs, Law & Order: Criminal Intent and Law & Order: Special Victims Unit. He played the chilling, murderous Navy SEAL, Larrick, in Season 2 of The Americans on FX television network.
He married Yuko Otomo in 2011; their daughter Lily was born December 5, 2012. He is the brother-in-law of Actress Toni Lewis by her marriage to Lee's brother, Chris (who served as the music supervisor on Oz).
He played an Alcoholics Anonymous sponsor in the second season of Desperate Housewives, becoming romantically involved with Bree Hodge. He appeared in the USA Network series Royal Pains and in Seasons 4–5 of the Lifetime Network series Army Wives. He played Evan Wright in the HBO mini-series Generation Kill.
