Grudem holds a BA from Harvard University, a Master of Divinity from Westminster Theological Seminary, and a PhD from the University of Cambridge. In 2001, Grudem became Research Professor of Bible and Theology at Phoenix Seminary. Prior to that, he had taught for 20 years at Trinity Evangelical Divinity School, where he was chairman of the department of Biblical and Systematic Theology.

Grudem served on the committee overseeing the English Standard Version translation of the Bible, and from 2005 to 2008 he served as General Editor for the 2.1 million-word ESV Study Bible (scheduled publication October 15, 2008). In 1999 he was the president of the Evangelical Theological Society. He is a co-founder and past president of the Council on Biblical Manhood and Womanhood. He is the author of, among other books, Systematic Theology: An Introduction to Biblical Doctrine, which advocates a Calvinistic soteriology, the verbal plenary inspiration and inerrancy of the Bible, the body-soul dichotomy in the nature of man, and the complementarian view of gender relationships.

Grudem, a Baptist, holds to noncessationist Charismatic beliefs and was at one time a qualified supporter of the Vineyard Movement and one of the main apologists and spokespeople for reuniting Charismatic, Reformed, and Evangelical churches.

Grudem had suggested that evangelicals should support the Mormon Republican candidate Mitt Romney for the US 2008 Presidential Election,[4] but later supported John McCain when McCain defeated Romney in the primary elections.

Grudem's son Elliot is pastor at Christ the King Presbyterian Church (PCA) in Raleigh, North Carolina.