Tadley Ewing Peake Dameron was born on February 21, 1917, in Cleveland, Ohio. His brother Caesar, a saxophonist, drew him toward jazz, and his first important job was with Freddie Webster's band in Cleveland, followed by work with the bands of Zack Whyte and Blanche Calloway. He wrote for Vido Musso in New York and in 1940 and 1941 was pianist and arranger for the Kansas City band Harlan Leonard and His Rockets, whose 1940 Bluebird single "A-La-Bridges" lists him as a co-writer. Charts for Jimmie Lunceford, Count Basie, Billy Eckstine's orchestra and Georgie Auld followed, along with "Good Bait," credited to him and Basie and introduced in 1944, and later work for Artie Shaw.

From 1945 to 1947 he wrote arrangements for Dizzy Gillespie's big band. "Hot House," composed in 1945, became an anthem of bebop after Gillespie and Charlie Parker recorded it for Savoy that year, and Gillespie's orchestra recorded "Our Delight" for Musicraft in 1946. In 1948 the Gillespie orchestra gave the premiere of Dameron's extended work Soulphony in Three Hearts at Carnegie Hall. In 1946 he and the lyricist Carl Sigman wrote "If You Could See Me Now" for Sarah Vaughan, who recorded it that year for Musicraft; it became one of her first signature songs and the song entered the Grammy Hall of Fame in 1998. In 1947 he also played piano with Babs Gonzales's Three Bips and a Bop.

His own small groups were the center of his work from the late 1940s. On September 26, 1947, a Blue Note sextet recorded "Our Delight," "The Squirrel," "The Chase" and "Dameronia" at WOR Studios in New York, with trumpeter Fats Navarro, alto saxophonist Ernie Henry, tenor saxophonist Charlie Rouse, bassist Nelson Boyd and drummer Shadow Wilson, and a septet that added the percussionist Chino Pozo cut "Jahbero" and "Lady Bird" on September 13, 1948. That summer and fall he led a sextet at the Royal Roost with Navarro in the front line, and radio broadcasts from the club in August and September 1948, also with tenor saxophonist Allen Eager, alto saxophonist Rudy Williams, bassist Curly Russell, drummer Kenny Clarke and, on the vibraphone, Milt Jackson, have since been issued on record. Two Capitol orchestra dates followed on January 18 and April 19, 1949. In May 1949 Dameron and Miles Davis co-led a quintet with tenor saxophonist James Moody, bassist Barney Spieler and drummer Kenny Clarke at the Paris Festival International de Jazz at the Salle Pleyel. He stayed in Europe for several months and worked briefly as a staff arranger for the English bandleader Ted Heath.

Back in the United States he played and arranged for the rhythm-and-blues singer Bull Moose Jackson in 1951 and 1952, in a band that also carried Benny Golson, who later called Dameron the most important influence on his writing. In 1953 he led a band with Clifford Brown and Philly Joe Jones, which was recorded at a show in Atlantic City and, on June 11, 1953, in New York for Prestige, with Golson, the alto saxophonist Gigi Gryce, trumpeter Idrees Sulieman, trombonist Herb Mullins, baritone saxophonist Oscar Estell and bassist Percy Heath; the Prestige sides appeared as A Study in Dameronia. Two further Prestige sessions at Rudy Van Gelder's studio in Hackensack, New Jersey, produced the octet album Fontainebleau (March 9, 1956, with trumpeter Kenny Dorham and baritone saxophonist Cecil Payne) and the quartet album Mating Call (November 30, 1956, with John Coltrane, bassist John Simmons and Jones).

Dameron developed an addiction to narcotics toward the end of his career. He was arrested on drug charges in 1957 and 1958 and served time in 1959 and 1960 in the federal prison hospital in Lexington, Kentucky. After his release he made one more notable record as a leader, The Magic Touch, recorded for Riverside in New York in 1962 with a large orchestra that included Clark Terry, trombonist Britt Woodman, Johnny Griffin, pianist Bill Evans, bassist Ron Carter and Jones, and he also scored recordings by Blue Mitchell, Sonny Stitt and Milt Jackson (Big Bags). He was sidelined by poor health, suffered several heart attacks, and passed away from cancer on March 8, 1965, at the age of 48. He was buried at Ferncliff Cemetery in Hartsdale, New York.

Dameron never prospered financially, but his music has been revisited steadily. Barry Harris recorded the album Barry Harris Plays Tadd Dameron in 1975, Jones and the trumpeter Don Sickler founded the repertory nonet Dameronia in the early 1980s, Jimmy Heath and Slide Hampton led a quintet devoted to his writing, and Joe Lovano included five of his tunes on the Grammy-winning 52nd Street Themes (2000).

Dameron is often called the most influential arranger of the bebop era, and Scott Yanow of AllMusic described him as the definitive arranger and composer of that period. He named George Gershwin and Duke Ellington as his greatest influences, and AllMusic describes his work as combining the emerging bebop sound with the melodic, swinging Kansas City sound. Tunes such as "Hot House," "Lady Bird," "Our Delight" and "If You Could See Me Now" are tuneful and harmonically adventurous, and Britannica notes that they were typically based on standard chord sequences ("Hot House" follows the progression of "What Is This Thing Called Love?"); "Lady Bird" gave its name to a turnaround that musicians still call the Tadd Dameron turnaround. The saxophonist Dexter Gordon called him the romanticist of bebop. As a pianist he had a light touch and a percussive attack and seldom took a solo, and "Fontainebleau," the title piece of his 1956 album, is through-composed and has no improvised solos. His arrangements were often written as settings for soloists, which DownBeat's John S. Wilson counted against The Magic Touch in a three-star review, while AllMusic gave the album 4.5 stars as close to a definitive Dameron recording. One writer named tuneful melodies and shifting internal voicings as his main legacy to arrangers such as Benny Golson, Gigi Gryce and Jimmy Heath, and Britannica calls Fats Navarro his most sympathetic interpreter.