Charlie Lee Byrd was born on September 16, 1925, in Suffolk, Virginia, and grew up in the nearby borough of Chuckatuck. His father, a mandolinist and guitarist, taught him steel guitar at the age of ten, and his brother Gene, known as Joe, became an upright bassist who worked in his groups for decades. Byrd entered Virginia Polytechnic Institute in 1942 and played in the school orchestra. He was drafted into the U.S. Army in 1943, saw combat in World War II, and was stationed in Paris in 1945, where he played in an Army Special Services band and toured occupied Europe in the all-soldier production G.I. Carmen. In Paris he saw Django Reinhardt perform, the earliest and greatest influence on his playing.

After the war Byrd studied composition and jazz theory at the Harnett National Music School in New York and took up the nylon-string classical guitar. He moved to Washington, D.C., in 1950 and studied classical guitar for several years with Sophocles Papas, and in 1954 he became a pupil of the Spanish master Andrés Segovia, working with him in Italy. Back in Washington he built a local reputation by dividing his club sets into separate jazz and classical halves. He began recording as a leader for Savoy in 1957 with Jazz Recital and Blues for Night People. That year he also met the bassist Keter Betts at a club called the Vineyard, and by October the two were regular performers at the Showboat, the Washington room where Byrd recorded the live sets later issued as the Jazz at the Showboat series. In 1959 Byrd and Betts joined Woody Herman's band for a three-week State Department goodwill tour of Europe, in a band that also included Vince Guaraldi, trombonist Bill Harris, Nat Adderley and drummer Jimmy Campbell.

The turning point came in 1961, when Byrd toured South America for the State Department and heard the new bossa nova movement in Brazil; the Washington radio host Felix Grant, who had Brazilian contacts, had already introduced him to the music. Back home he played recordings by João Gilberto and Antonio Carlos Jobim for Stan Getz at the Showboat Lounge, and the two decided to make an album of the songs. Getz persuaded Creed Taylor of Verve to produce it, but the first sessions satisfied neither musician, so Byrd rehearsed a group of players who had been to Brazil with him until it was ready. The album, Jazz Samba, was recorded on February 13, 1962, in a building next to All Souls Unitarian Church in Washington, with Byrd and Getz joined by Betts, Joe Byrd and the two drummers Buddy Deppenschmidt and Bill Reichenbach, whose pairing made the samba rhythm easier to reach. Released in April 1962, it entered the Billboard pop album chart that September, reached number one in March 1963 and stayed on the chart for seventy weeks. Its single "Desafinado," by Jobim, won Getz a Grammy Award, and the record brought bossa nova into the mainstream of North American music.

Byrd signed with Riverside, which reissued six albums he had cut for the small Offbeat label, and made Latin Impressions and Bossa Nova Pelos Passaros (both 1962) and Once More! Charlie Byrd's Bossa Nova (1963). In 1963 he toured Europe with Les McCann and Zoot Sims, and in 1964 and 1965 he appeared at the Newport Jazz Festival with the Episcopal priest Malcolm Boyd, accompanying prayers from Boyd's book Are You Running with Me, Jesus? A move to Columbia produced Guitar/Guitar (1965) with Herb Ellis, Brazilian Byrd (1965), Sketches of Brazil (1968), a set of Heitor Villa-Lobos pieces, and a run of albums built on pop repertoire. In 1967 he took legal action against Getz and MGM over his payment for Jazz Samba and came away with a share of the album's royalties.

In 1973 Byrd settled in Annapolis, Maryland, and was based at the King of France Tavern in the Maryland Inn from that year until his death. That year he also recorded Tambu with the vibraphonist Cal Tjader, the only album the two made together, and joined Ellis and Barney Kessel to form the Great Guitars, with drummer Johnny Rae. From the mid-1970s he recorded chiefly for Concord Jazz, on albums that ranged from Great Guitars dates and the trio set Blue Byrd to Brazilian collaborations with Laurindo Almeida and Bud Shank, and in the late 1980s he made two albums with the Annapolis Brass Quintet and appeared with them in more than fifty concerts across the United States. The drummer Chuck Redd joined his trio in 1980, according to his own profile, and stayed until Byrd's death. Later Concord projects included The Washington Guitar Quintet (1992), with four Washington-area classical guitarists, and Du Hot Club de Concord (1995), a Django-inspired quintet date. He also wrote an instructional book, Charlie Byrd's Melodic Method for Guitar, published in 1973.

The Community Arts Alliance of Maryland named Byrd a Maryland Art Treasure in 1997, and in 1999 the government of Brazil made him a Knight of the Order of Rio Branco. He passed away of lung cancer at his home in Annapolis on December 2, 1999, at the age of 74. Concord issued his albums My Inspiration in 1999 and For Louis in 2000.

Byrd played fingerstyle on a nylon-string classical guitar, a rare instrument in jazz, and he brought classical technique to standards, blues and Brazilian songs. His earliest and greatest influence was Django Reinhardt, whom he saw perform in Paris as a soldier, and his teachers Sophocles Papas and Andrés Segovia shaped the classical side of his playing. AllMusic's Richard S. Ginell described his playing as tasteful, low-key and melodic, and credited him with two lasting achievements: applying acoustic classical guitar technique to jazz and popular music, and helping introduce Brazilian music to large North American audiences. The second ran through Jazz Samba and his Riverside bossa nova albums, and through later Concord dates with Brazilian guitarists. In the Great Guitars his nylon-string guitar sat beside the electric guitars of Herb Ellis and Barney Kessel. Others have carried his work forward, among them Chuck Redd, whose profile says Byrd gave him albums brought back from Brazil, and the guitarist Gene Bertoncini, who recorded a duo tribute album to Byrd with Royce Campbell in 2001.