Born in Cleveland, Ohio to devoutly Baptist parents Paul Craven and Caroline Miller, Craven later earned an undergraduate degree in writing and psychology from Wheaton College in Illinois, and a masters degree in writing seminars from Johns Hopkins University. Prior to landing his first job in the film industry as a sound editor for a post-production company in New York, Craven briefly taught English at Westminster College and was a humanities professor at Clarkson University. With now ex-wife Bonnie Chapin, he is the father of Jonathan and Jessica Craven.

Craven's works tend to share a common exploration of the nature of reality. A Nightmare on Elm Street, for example, dealt with the consequences of dreams in real life. Wes Craven's New Nightmare "brushes against" (but doesn't quite break) the fourth wall by having actress Heather Langenkamp play herself as she is haunted by the villain of the film in which she once starred. At one point in the film, we see on Wes Craven's word processor a script he has written, which includes the exact conversation he just had with Heather — as if the script is being written as the action is unfolding. The Serpent and the Rainbow portrays a man who cannot distinguish between nightmarish visions and reality. In Scream, the characters frequently reference horror films similar to their situations, and at one point Billy Loomis tells his girlfriend that life is just a big movie. This concept was emphasized in the sequels, as copycat stalkers reenact the events of a new film about the Woodsboro killings occurring in Scream. Craven was also set to direct Beetlejuice but dropped out to co-write and executive produce the third outing for Freddy Kruger. He says that he got the idea for "the" Elm Street by living next to a graveyard on Elm Street in his small home town of Wheaton, Illinois.

Though there have been seven different Nightmare on Elm Street films (eight if one includes the crossover Freddy vs Jason), only two have been directed by Craven himself. He has said in several interviews and discussions that he only considers his two films to be accurate depictions of his creation. For years it has been rumored that he would make one more film, essentially completing his trilogy. Rumors about the film vary considerably, from a prequel that would take place before the events in the first film, to a direct sequel to 1994's New Nightmare, to the possibility that Craven might write and direct the next "Freddy vs..." film. He was an uncredited executive producer of the "Freddy Vs Jason" movie of 2003.