Rice was born at Shardeloes, an historic English country house near Amersham, Buckinghamshire, United Kingdom that was requisitioned as a maternity hospital during World War II. His father, Hugh Gordon Rice, served with the Eighth Army and reached the rank of major during World War II, whilst his mother, Joan Odette (née Bawden), served in the Women's Auxiliary Air Force (WAAF) as a photographic interpreter. After the war, they worked for the de Havilland aircraft company.
Along with his brother Jo and the radio presenters Mike Read and Paul Gambaccini, he was a co-founder of the Guinness Book of British Hit Singles and served as an editor from 1977 to 1996. He has also been a frequent guest panellist for many years on the radio panel games Just a Minute and Trivia Test Match. Rice often jokes that he is most recognised in America for his appearance in the film About a Boy. The film includes several clips from a (real) edition of the game show Countdown on which he was the guest adjudicator. His other interests include cricket (he was President of the MCC in 2002) and maths. He wrote the foreword to the book Why Do Buses Come In Threes by Rob Eastaway and Jeremy Wyndham, and featured prominently in Tony Hawks's One Hit Wonderland, where he co-wrote the song which gave Hawks a top twenty hit in Albania.
He released his autobiography Oh What a Circus: The Autobiography of Tim Rice in 1998, which covered his childhood and early adult life until the opening of the original London production of Evita in 1978. He is currently working on a sequel, covering his life and career since then.
Rice was re-united with Andrew Lloyd Webber in 2011 to pen new songs for Lloyd Webber's newest production of The Wizard of Oz which opened in March 2011 at the London Palladium. Rice has, however, rejected working with Webber again, claiming their partnership has run its course, and they are "no longer relevant as a team".
Rice married Jane McIntosh on 19 August 1974, having met when working at Capital Radio. The marriage dissolved in the late 1980s after the British tabloid newspapers revealed that he had been conducting an affair with actress/singer Elaine Paige. Jane retains the title Lady Rice as despite obtaining a divorce decree nisi, Sir Tim never made it absolute and therefore they remain technically married.
Lady Rice manages the family's 33,000-acre Dundonnell estate which Sir Tim bought in 1998 for £2 million. She has won awards for her conservation work with red squirrels.  They have two children, Eva, a novelist and singer/songwriter, and Donald, a film director who also helps to run Dundonnell. Eva, who was named after the title character from Evita, is the author of the novel The Lost Art of Keeping Secrets, which was a finalist for the British Book Award Best Read of the Year. Sir Tim also has a daughter from another relationship with Nell Sully an artist, called Zoe 
Tim Rice supports Sunderland A.F.C.football club. He was awarded an honorary doctorate of letters by the University of Sunderland at a ceremony at the Stadium of Light in November 2006. He was also a supporter of the Conservative Party, but in 2007 stated that the Conservatives were no longer interested in him and that his relationship with the Party had "irrevocably changed." He was reported in early 2014 to be a donor for the UK Independence Party However, he has since stated in an interview for Chat Life that the article was referring to a one off payment that he made at a dinner event held by the party around two years earlier advocating opposition to wind turbine construction, and that he was not a member or regular donor to any political party.
Describing his religion, Rice has stated, “Technically I'm Church of England, which is really nothing. But I don't follow it. I wouldn't say I was a Christian. I have nothing against it." Conversely, he also stated that he adapted the biblical stories of Joseph and Jesus to musicals because "I'd always rather take a true story over an untrue one."
Rice runs his own amateur Heartaches Cricket Club, the name inspired by an Elvis Presley song.
2011 – The Wizard of Oz with music by Andrew Lloyd Webber for 6 new songs; also additional lyrics for 4 songs with music by Harold Arlen and lyrics by E.Y. Harburg. The remaining 13 songs are solely by Arlen and Harburg.
"Peterloo", was requested by Sir Malcolm Arnold's estate to write lyrics to the Peterloo Overture [commemorating the horrific St Peter's Fields Massacre and maiming of men, women and children at a meeting in Manchester in Aug 1819]. There was in mind to use it in 2012 for the Olympics or for the Queen's Jubilee celebrations [60 years on throne] but instead it had its premiere at the Royal Albert Hall in London at 'The Last Night of the Proms' on Saturday September 13th 2014 which was broadcast on BBC television.