Terry Callier was born in the Chicago, and raised in the Cabrini–Green housing area. He learned piano, was a childhood friend of Curtis Mayfield, Major Lance and Jerry Butler, and began singing in doo-wop groups in his teens.
In 1962 he took an audition at Chess Records, where he recorded his debut single, "Look at Me Now". At the same time as attending college, he then began performing in folk clubs and coffee houses in Chicago, becoming strongly influenced by the music of John Coltrane. He met Samuel Charters of Prestige Records in 1964, and the following year they recorded his debut album. Charters then took the tapes away with him into the Mexican desert, and the album was eventually released in 1968 as The New Folk Sound of Terry Callier. Two of Callier's songs, "Spin, Spin, Spin" and "It's About Time", were recorded by the psychedelic rock band H. P. Lovecraft in 1968, as part of their H. P. Lovecraft II album. H. P. Lovecraft featured fellow Chicago folk club stalwart George Edwards, who would go on to co-produce several tracks for Callier in 1969.
He continued to perform in Chicago, and in 1970 joined the Chicago Songwriters Workshop set up by Jerry Butler. He wrote material for Chess and its subsidiary Cadet label, including The Dells' 1972 hit "The Love We Had Stays on My Mind", as a result of which he won his own recording contract with Cadet as a singer-songwriter. Three critically acclaimed but commercially unsuccessful albums followed, produced by Charles Stepney in a style which critics termed "jazz-folk" - Occasional Rain (1972), What Color Is Love (1973), and I Just Can't Help Myself (1974). He also toured with George Benson, Gil Scott-Heron and others. However, Callier was then dropped by Cadet, and the Songwriters Workshop closed in 1976. The following year, he signed a new contract with Elektra Records, releasing the albums Fire On Ice (1977) and Turn You to Love (1978). The opening track of the latter album, "Sign Of The Times", was used as the theme tune of radio DJ Frankie Crocker and became Callier's only US chart success, reaching # 78 on the R&B chart in 1979 and prompting his appearance at the Montreux Jazz Festival.
Callier continued to perform and tour until 1983, when he gained custody of his daughter and retired from music to take classes in computer programming, landing a job at the University of Chicago and returning to college during the evenings to pursue a degree in sociology. He re-emerged from obscurity in the late 1980s, when British DJs discovered his old recordings and began to play his songs in clubs. Acid Jazz Records head Eddie Piller reissued a little-known Callier recording from 1983, "I Don't Want to See Myself (Without You)", and brought him to play clubs in Britain. From 1991 he began to make regular trips to play gigs during his vacation time from work.
In the late 1990s Callier began his comeback to recorded music, contributing to Beth Orton's Best Bit EP in 1997 and releasing the album Timepeace in 1998, which won the United Nations' Time For Peace award for outstanding artistic achievement contributing to world peace. His colleagues at the University of Chicago never learned of Callier's life as a musician, but after the award the news of his secret life became widely known and subsequently led to his firing.
As well as touring internationally, Callier continued his recording career, having currently released five albums since Timepeace, including Lifetime (1999), Alive (2001), Speak Your Peace (2002) and Lookin' Out (2004). May 2009 saw his album Hidden Conversations featuring Massive Attack released on Mr Bongo. In 2001, Callier performed "Satin Doll" for the Red Hot Organization's compilation album Red Hot + Indigo, a tribute to Duke Ellington, which raised money for various charities devoted to increasing AIDS awareness and fighting the disease.