Born in Spokane, Washington to a jazz drummer father (he played in Bing Crosby's band), Nelson avoided the family business and formed a stand-up comedy act with director Barry Levinson, who went on to do Diner and Wag the Dog.
When he was growing up, he wanted to become a hydroplane racer. His father, however, declared that doing so was an impossible feat, like becoming an actor. So Nelson gave up his dream of hydroplane racing and promptly embarked upon an acting career.
He has appeared in numerous motion pictures. He starred in three television shows, Coach, Call to Glory and The District. He also provided the voice of Mr. Incredible in the 2004 Pixar film, The Incredibles. He is one of the few ultimate survivors of the supposed "Poltergeist curse".
Nelson was introduced to auto racing when he participated in the Pro Celebrity race during the 1991 Long Beach Grand Prix. He finished third and was hooked. In 1992, he formed Screaming Eagles Enterprise and became a team owner/driver. After campaigning an entry in the American City Racing League (ACRL) and finishing second in points in 1993 and fourth in 1994.
In 1994 Nelson began racing World Sports Car prototypes, and from 1994-'97 he made 24 career WSC starts, including the Rolex 24 At Daytona and the Sebring 12 Hours endurance races in 1995, '96 and '97.
Nelson's 24 WSC starts produced two top-five and 17 top-10 class finishes, with career-high fifth-place finishes achieved in 1995 at Texas World and in 1996 at Road Atlanta. In 1995, Nelson was named IMSA's "Most Improved Driver of the Year."
Best know for his role as Hayden Fox in the hit ABC series COACH, he completed his ninth and final season in the role in 1997. For his work on the series, he received three Emmy nominations in 1990, 1991, and 1992 for Outstanding Lead Actor in a Comedy Series, winning the Emmy for the 1991-1992 season. He has also been honored by the Hollywood Foreign Press Association with four Golden Globe nominations.
Nelson is a longtime friend of Craig Breedlove. He recalled some advice Breedlove once gave him. Nelson was racing at Road Atlanta in 1995 and Breedlove was there to support his friend. During the race, Spice-Olds driver Jeremy Dale T-boned Fabrizio Barbazza's Ferrari at more than 100 mph. The impact tore the Ferrari in half, shattered Dale's legs and broke Barbazza's arm and leg. As Nelson puts it, "The ballet went bad." While Dale was being flown to hospital, Breedlove took Nelson aside. "Whatever you do," Breedlove said to him, "don't think about what happened for at least three days. Don't make any decisions based on what you've seen here."