Pancholy was born in Dayton, Ohio. He moved around while growing up. His family comes from Gujarat, and his grandparents live in Ahmedabad. He is a 1991 graduate of the Berkeley Preparatory School in Tampa, Florida, and went on to major in Theatre at Northwestern University, where he received his bachelor's degree in 1995. He then attended the Yale School of Drama, where he received his Master of Fine Arts in 2003.
His stage credits in New York City include the Culture Project's production of Guantanamo: Honor Bound to Defend Freedom in 2004, a workshop of the play Morbidity & Mortality at the historic Cherry Lane Theatre in 2005, and the lead role in India Awaiting at the Samuel Beckett Theatre. In January 2015, he joined the cast of Terrence McNally's It's Only a Play, replacing Rupert Grint when the production's Broadway run was extended.
Pancholy came out as gay in a November 2013 interview with Out magazine in which he discussed his partner of nine years, chef/caterer Ryan Corvaia. They got engaged at the Taj Mahal in January 2014 and were married in September that year.
On April 25, 2014, Pancholy was named to President Barack Obama's Advisory Commission on Asian Americans and Pacific Islanders as part of the White House Initiative on Asian Americans and Pacific Islanders. On February 25, 2017, Pancholy and nine other members of the commission resigned from their positions, citing administrative actions by President Donald Trump that they claimed went "against the commission's principles".
On February 13, 2017 StarTrek.com stated that Pancholy will play Nambue, Chief Medical Officer of the USS Shenzhou in the upcoming TV series Star Trek: Discovery. The series' pilot episode is set to air in September 2017, and season one is to air on CBS streaming Service in America and Netflix abroad.
