Hanson was born in Reno, Nevada and grew up in Los Angeles, the son of Beverly June (Curtis), a real estate agent, and Wilbur Hale "Bill" Hanson, a teacher. Hanson dropped out of high school, finding work as a freelance photographer and editor for Cinema magazine.
In 1970, Hanson co-wrote The Dunwich Horror, an adaptation of H.P. Lovecraft's short story. Hanson wrote and directed his next feature Sweet Kill in 1973, then in 1978 wrote and produced The Silent Partner, starring Elliott Gould and Christopher Plummer. As the 1980s and 1990s began, he directed a string of comedies and dramas. He did thrillers, too: many of them would deal with people who would lose a sense of control or security when facing danger and the threat of death. Some, like the financial executive in Bad Influence and the police officers in L.A. Confidential unexpectedly walk into violence and disaster.
Hanson claims to be heavily influenced by Alfred Hitchcock and Nicholas Ray. He previously stated that Ray's film In a Lonely Place was among many that he watched in preparation for the filming of L.A. Confidential. In 8 Mile, Kim Basinger's character is watching Elia Kazan's Pinky on television, a film about a mixed race girl passing as white - an homage to the themes of racial mixing and boundary crossing that are features of most of Hanson's work.