Born in Oklahoma, Lee's early years were spent living in the Middle East. Eventually, his family moved to New Orleans, back in the United States, and later to Houston, Texas. Lee went high school in Houston, where he first began acting. He became so involved with his acting that he dropped out of school to perform at the local Alley Theatre. In 1997, upon finishing his final high school courses, Lee was accepted to The Juilliard School's Drama Division. During his time at Juilliard, Lee honed his acting skills, performing in classic roles such as Romeo in Romeo and Juliet, the title role in King Richard II, and Cassius in Julius Caesar, among others.
After graduating from Juilliard with a Bachelor of Fine Arts (BFA) degree, Lee starred in the off-Broadway play The Credeaux Canvas, which received critical acclaim, as well as being part of the Vineyard production of The Fourth Sister.In 2003, Lee Pace starred in the made-for-TV movie Soldier's Girl, a Sundance hit. The film was based on the true story of a transgendered nightclub performer in love with a soldier who is brutally murdered for their relationship. His performance earned him nominations for both the Golden Globe and the Independent Spirit Award. He won a Gotham Award for Outstanding Breakthrough Performance.
Lee also starred in a limited engagement of the off-Broadway production Small Tragedy in the spring of 2004, and was nominated for a Lucille Lortel Award in the category of Outstanding Actor. He earned his second Lucille Lortel Award nomination in the same category for his performance in Guardians. On the small screen, Lee had a starring role in Wonderfalls, a quirky dramedy that was very short-lived, much to the disappointment of its loyal, albeit small, fan base. As of 2007, Lee is once again working with Bryan Fuller on a quirky dramedy, Pushing Daises.