Ildefonso "Poncho" Sanchez was born in Laredo, Texas, on October 30, 1951, the youngest of eleven children in a Mexican-American family. The family moved to Norwalk, a suburb of Los Angeles, in 1954. At home his sisters danced to mambo and cha-cha-cha records and to the Latin dance shows of the disc jockey Chico Sesma, while his older brothers kept the radio on jazz stations that played Duke Ellington, John Coltrane and Art Blakey, and rhythm and blues came off the air alongside both. He also attended Cerritos College.

His first instrument was the guitar. A singing audition for a neighborhood rhythm and blues band, the Halos, whose rehearsals he could hear from across the street, turned into his first paid job as the group's lead vocalist, and he went on to teach himself flute, drums and timbales before settling on the congas in his teens. With two neighborhood friends, the timbalist Ramon Banda and the bassist Tony Banda, he played in Little Jimmy y los Vagabundos, then in the Latin-rock group Sabor, which he co-led, covering Tower of Power, Chicago, Blood, Sweat & Tears, Mongo Santamaría and Ray Barretto. He worked days at an aluminum foundry and played clubs and weddings at night.

In 1975 a Navy friend of Cal Tjader told the vibraphonist about him. Tjader invited him to sit in at Concerts by the Sea in Redondo Beach, and a few weeks later offered him five nights at the Coconut Grove in the Ambassador Hotel in Los Angeles, opposite Carmen McRae, starting on New Year's Eve. After the first set Tjader told him the job was his. Sanchez stayed in the band for the next seven years and is credited on Tjader's albums from At Grace Cathedral (Fantasy, 1977) through Heat Wave, the 1982 Concord Jazz date with McRae, and the posthumous Good Vibes (1984). La Onda Va Bien (1980), the album that opened Concord's Picante imprint, won the Grammy Award for Best Latin Recording. Tjader died of a heart attack in Manila on May 5, 1982, while on tour, and Sanchez has said he was in the room.

While he was still with Tjader, Sanchez put together his own group with Ramon Banda, the trumpeter Sal Cracchiolo and the reed player Dick Mitchell, friends who had been rehearsing bebop in a garage, and it became the Poncho Sanchez Latin Jazz Band. He led it between Tjader engagements. The pianist and arranger Clare Fischer produced, arranged and conducted his first two records for Discovery, Poncho (recorded January 10, 1979, at TTG Studios in Los Angeles, with Gary Foster on alto saxophone and flute) and Straight Ahead (1980), and Sanchez played congas on Fischer's own Machaca (MPS, 1980). Before his death, Tjader recommended Sanchez to Carl Jefferson, the founder of Concord Records.

Sonando, recorded in August 1982 and released in January 1983 with Jefferson producing, began a Concord association that ran through Trane's Delight in 2019. Bien Sabroso (1984), El Conguero (1985), Papa Gato (1987), ¡Fuerte! (1988) and La Familia (1989) followed, many of them co-written with the band's pianist and arranger Charlie Otwell. The 1990s widened the circle. Chile Con Soul (1990) brought in Tito Puente as a special guest on timbales and, by AllMusic's account, earned him international airplay and invitations to play in Europe and Asia. Cambios (1991) put Freddie Hubbard on trumpet and flugelhorn for three tracks, among them "Yesterdays" and "My Foolish Heart." A Night at Kimball's East was recorded live in Emeryville, California, on December 8, 1990. On Para Todos (1994) Eddie Harris played tenor saxophone on four tracks, Soul Sauce: Memories of Cal Tjader (1995) was his tribute to his old employer, and on Conga Blue (1996) Mongo Santamaría joined him as a special guest on four tracks: "Bésame Mama," the title piece, "Watermelon Man" and "Mon Pa Mon Po." Freedom Sound (1997) featured Wilton Felder and Wayne Henderson of the Jazz Crusaders, the group whose records on AM radio had shaped his teens, and Afro-Cuban Fantasy (1998) added Dianne Reeves on three tracks.

Latin Soul (Concord Picante, 1999) was his breakthrough. At the 42nd Grammy Awards, held at the Staples Center in Los Angeles on February 23, 2000, it won Best Latin Jazz Performance, ahead of nominees that included Chucho Valdés and Gonzalo Rubalcaba. The category was renamed Best Latin Jazz Album the following year, and his award is often listed under that name. The records that followed kept widening the guest list: Soul of the Conga (2000) added the organist Joey DeFrancesco and Terence Blanchard, Latin Spirits (2001) had Chick Corea on piano for the title piece and Wayne Shorter's "Ju Ju," and Out of Sight! (2003) turned to soul-jazz and funk with guests from the James Brown circle, among them the trombonist Fred Wesley. Do It! (2005) was a program of Latin jazz standards with Hugh Masekela and Tower of Power as guests, and Raise Your Hand (2007) brought in Maceo Parker, Booker T. Jones and Steve Cropper, according to AllMusic.

Psychedelic Blues (Concord Picante, 2009), a hard bop and boogaloo set with Arturo Sandoval soloing on one track, was nominated for the Grammy for Best Latin Jazz Album at the 53rd Grammy Awards on February 13, 2011. Chano y Dizzy! (Concord Picante, September 27, 2011), billed to Sanchez and Blanchard together, took on the Afro-Cuban repertoire of Dizzy Gillespie and the conga player Chano Pozo, and it was nominated for a Latin Grammy. The concert album Live in Hollywood followed on October 30, 2012, and then the band went seven years without a new studio album, though Sanchez kept touring and guesting on other leaders' records. Trane's Delight (Concord Picante, September 20, 2019), his tribute to John Coltrane, brought another Best Latin Jazz Album nomination, at the 63rd Grammy Awards on March 14, 2021. Live at the Belly Up Tavern, recorded in Solana Beach, California, on June 11, 2023, was released on May 16, 2025. Sanchez turned 75 on October 30, 2026, and the band's own site currently lists Francisco Torres on trombone as musical director, Ron Blake on trumpet, Andy Langham on piano, Ross Schodek on bass, Giancarlo Anderson on bongos, Jose Perez on timbales and Tom Luer on saxophones and flute.

Sanchez plays Afro-Cuban rhythm as a Mexican-American from Los Angeles who grew up on soul and bebop as much as on mambo, and the result is a band that sounds like all of it at once: straight-ahead jazz, gritty soul and funk, and the guaracha, son montuno and cha-cha-cha of Cuba. AllMusic's Thom Jurek calls him one of the most influential percussionists in jazz and credits him with a major role in the worldwide revival of Latin jazz. His models are named in his own records: Cal Tjader, whom he called his musical father, Mongo Santamaría, his personal hero and later a close friend, Tito Puente, Willie Bobo (a medley of whose tunes sits on Psychedelic Blues), and the Jazz Crusaders, whose soul-jazz harmonies color the horn writing. The first record he bought with his own money was John Coltrane's 1962 album Coltrane on Impulse!, and Trane's Delight is his tribute to the saxophonist. He sings lead in a rough rhythm and blues voice, and some purists have balked at that showmanship, while critics have said he follows Tjader's formula of putting American standards over Latin rhythms. His answer in a JazzTimes profile was that he plays Latin jazz and salsa acoustically and authentically, and that Latin jazz is American music, born in the United States with Dizzy Gillespie and Chano Pozo in the 1940s. He recalls sitting in with rumberos who could hardly believe that a Mexican-American could play the drum so well.