Gammon was born in Newman, Illinois, the son of Doris Latimer (née Toppe), a farm girl, and Donald Gammon, a musician. After his parents divorced, he made his way to Orlando, Florida. He worked at Orlando's ABC TV affiliate WLOF-TV (Channel 9), as a cameraman and director. In his 20s, he packed up and moved to Hollywood to find work.
In the 1970s, Gammon helped found the Met Theatre in Los Angeles. While performing there, a rep from The Public Theater saw him and had him cast as Weston in Sam Shepard's Curse of the Starving Class in 1978. The two became friends afterward. He made his sole Broadway appearance as "Dodge" in a revival of Sam Shepard's Buried Child. He was nominated for a Tony Award for his performance. He appeared on stage in Sam Shepard's San Francisco debut of The Late Henry Moss along with Nick Nolte, Sean Penn, Cheech Marin (both of Nash Bridges) and Woody Harrelson in 2000.
Gammon may be best-remembered for his characters Lou Brown, manager of the Cleveland Indians in the Major League films; and Nick Bridges, the father of Don Johnson's title character in the television series Nash Bridges. He appeared in the films Cool Hand Luke (1967), Macon County Line (1974), Urban Cowboy (1980), Any Which Way You Can (1980), Silverado (1985), Noon Wine (1985), The Milagro Beanfield War (1988), Major League (1989), Revenge (1990), The Adventures of Huck Finn (1993), Major League II (1994), Wyatt Earp (1994), Wild Bill (1995), Truman (1995), The Hi-Lo Country (1998), Cold Mountain (2003), and more recently Appaloosa (2008). He also had an uncredited role in Natural Born Killers (1994).

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