Payne was born in Nashville, Tennessee, the son of guitarist Jody Payne and Grammy Award-winning country singer Sammi Smith. His father became a longtime picker for Willie Nelson; his mother toured with Waylon Jennings. Payne is named for Jennings, who is his godfather. Due to the divorce of his parents and their heavy touring schedules, when he was about four months old Payne's mother placed him with her brother and sister-in-law, Bob and Yvonne, in Vidor, Texas. Although he spent summers out on the road with his mother, he lived with his uncle and aunt, who were strict Christians, until he was about age 18.
After high school, Payne enrolled in a seminary to become a minister. Payne had also acquired a taste for beer, marijuana, and popular music, which made his downfall complete in the eyes of his aunt and uncle. "I haven't seen them since," he has said. "I was branded a sinner and basically disowned." 
Payne's music industry career began to take shape in the clubs of Los Angeles. He was part of the popular Eastbound and Down country night at the King King Club in Hollywood, which featured musicians playing pure, uncompromising roots music and appealed to such artists as Lucinda Williams and Dwight Yoakam. Prohibited was the playing of anything but traditional classics by Hank Williams, George Jones and other performers of true country.
While in L.A., Payne wrote and recorded some songs with the help of his group of musical friends, which included producer Keith Gattis. With the record completed, but no deal to market it, Payne was playing New York with Willie Nelson and Pat Green when Green suggested he play the album for his label, Republic/Universal. Payne was signed with the label and his début album, "The Drifter," was released June 22, 2004.
Payne was featured in the role of fellow country music artist Jerry Lee Lewis in the hit 20th Century Fox movie Walk the Line (2005), which stars Joaquin Phoenix as Johnny Cash and Reese Witherspoon as June Carter, and did all his own singing. Payne then starred as Hank Garland in an independent feature about the legendary guitarist's life titled Crazy (2007).
Waylon Payne was also featured in the role as Tony Nash in the 2014 film The Identical.
- Prince, Jeff (2007-01-03). "Pilgrim and a Preacher and a Problem when He's Stoned". Fort Worth Weekly. Retrieved 2007-08-05.