Leonard Harold Breau was born on August 5, 1941, in Auburn, Maine, the son of the country musicians Hal "Lone Pine" Breau and Betty Cody. The family moved to Moncton, New Brunswick, in 1948, and he started on guitar at eight. By fourteen he was lead guitarist in his parents' band, billed as Lone Pine Junior, playing instrumentals by Merle Travis and Chet Atkins and sometimes singing. At fifteen he made his first recordings in Westbrook, Maine, for Al Hawkes at Event Records, sessions that stayed in the can until they appeared as Boy Wonder in 1998. In 1957 the family settled in Winnipeg, where the band broadcast on radio station CKY as the CKY Caravan.

Around 1959 Breau left the family band after a falling-out with his father over the jazz he was bringing into the act. He sought out Winnipeg jazz players, worked rooms such as Rando Manor and the Stage Door, and took lessons in jazz fundamentals from the pianist Bob Erlendson. In 1961 he cut his first professional jazz session at Hallmark Studios in Toronto, with Rick Danko and Levon Helm, later of The Band, as the rhythm section on part of it; the tapes were not released until 2003. In 1962 he joined the Toronto trio Three with the vocalist and actor Don Francks and the bassist Eon Henstridge. The group played Toronto, Ottawa and New York, appeared in the National Film Board documentary Toronto Jazz, and was taped live at Toronto's Purple Onion club, a set that surfaced as At the Purple Onion in 2004.

Back in Winnipeg he worked as a session guitarist for CBC Radio and Television, played on the programs Teenbeat and Music Hop, and had his own series, The Lenny Breau Show. In 1963 and 1964 he was a Sunday-night regular at David Ingram's Fourth Dimension club in the suburb of Fort Garry, where the young Randy Bachman, who was strongly influenced by Breau, also came to listen. In 1967 recordings from the television show reached Atkins, who became his friend and champion and helped bring him to RCA. Guitar Sounds from Lenny Breau was made in Nashville with the Winnipeg rhythm section of Ron Halldorson and Reg Kelln, and Atkins then arranged a live recording in Los Angeles for The Velvet Touch of Lenny Breau - Live! Carol Kaye later recalled that the room was full of the city's guitarists, naming Howard Roberts, George Van Eps and Joe Pass. Neither record sold well, and Breau did not release another solo album for about ten years.

He left Winnipeg in 1976 and spent his last years in the United States, living in Maine, Nashville, Stockton, California, and New York before settling in Los Angeles in 1983. He taught, wrote for Guitar Player magazine and kept recording: Minors Aloud with the pedal steel guitarist Buddy Emmons, three albums' worth of sessions for Adelphi Records in 1977 and 1978, the mail-order The Legendary Lenny Breau...Now! at Atkins's home studio in Nashville, a duet album with Atkins, Standard Brands (1981), and When Lightn' Strikes (1982), the only studio recording of him on a seven-string guitar. In June 1983 he was taped in Toronto with the bassist Dave Young, material later issued as Legacy, Quietude and Live at Bourbon Street. He had struggled with drugs and alcohol since the 1960s and managed to bring them under control in his last years.

Breau's body was found on August 12, 1984, in the rooftop swimming pool of the Los Angeles apartment building where he lived; he was 43. Early reports spoke of drowning, but the coroner announced that he had been strangled, and the death was ruled a homicide. No one was charged, and the case remains unsolved. Two live sets from Donte's in Hollywood, recorded that June, have since been issued: LA Bootleg 1984 (2014), with bassist Paul Gormley and drummer Ted Hawke, which was nominated for a Juno Award for Jazz Album of the Year: Solo, and a Jazz Cat Records release dated June 18, 1984, with the bassist John Patitucci and Hawke. Breau was inducted into the Canadian Music Hall of Fame in 1997. Bachman's Guitarchives label and Paul Kohler's Art of Life Records brought much of the unissued material out, and his daughter Emily Hughes produced the documentary The Genius of Lenny Breau (1999), followed by The Genius of Lenny Breau Remembered (2018).

Breau grew up on the fingerstyle guitar of Chet Atkins and Merle Travis, added flamenco technique from the Spanish guitarist Sabicas, and built on that a right hand able to carry bass, chords and melody at once, with rapid runs of artificial harmonics. His harmonic thinking came from jazz piano, above all Bill Evans, whose pieces such as "Funny Man" and "The Two Lonely People" he arranged for guitar, and he described his approach as playing the guitar like a piano, with an accompaniment on the low strings under the melody. He had two custom seven-string guitars built, one classical and one electric by Kirk Sand, each with a high A string added; since no manufacturer made a string of the right gauge for the classical instrument, he first used fishing line until La Bella began producing one for him. Atkins called him the greatest guitarist in the world, and Pat Metheny, George Benson and the guitarist Ted Greene were among those who spoke of him in the 1999 documentary. His reputation rests on a small catalog of lifetime releases and a large body of posthumous live and home recordings, issued largely through the efforts of fans and family.