Woods was born in Springfield, Massachusetts. He studied music with Lennie Tristano, who influenced him greatly, at the Manhattan School of Musicand at The Juilliard School. His friend, Joe Lopes, coached him on clarinet as there was no saxophone major at Juilliard at the time. Although he did not copy Charlie "Bird" Parker, bop's greatest saxophonist, he was known as the New Bird, a label which was also attached to other alto players such as Sonny Stitt and Cannonball Adderley at one time or another in their careers.
After moving to France in 1968, Woods led The European Rhythm Machine, a group which tended toward avant-garde jazz. He returned to the United States in 1972 and, after an unsuccessful attempt to establish an electronic group, he formed a quintet which was still performing, with some changes of personnel, in 2004. As his theme, Woods uses a piece titled "How's Your Mama?"
In 1979, Woods made the recording, More Live, at the Armadillo World Headquarters in Austin, Texas. Perhaps his best known recorded work as a sideman is a pop piece, his alto sax solo on Billy Joel's "Just the Way You Are." He also played the alto sax solo on Steely Dan's "Doctor Wu," from their critically acclaimed 1975 album Katy Lied, as well as Paul Simon's 1975 hit, Have a Good Time.
Although Woods is primarily a saxophonist he is also a fine clarinet player and solos can be found scattered through his recordings. One good example is his clarinet solo on Misirlou on the album Into The Woods (see discography below).
Phil Woods married Chan Parker, the widow of Charlie Parker, and was stepfather to Chan's daughter, Kim.
Woods, along with Rick Chamberlain and Ed Joubert founded the organization Celebration of the Arts (COTA) in 1978 late one night in the bar at the Deerhead Inn in Delaware Water Gap. The organization would eventually become the Delaware Water Gap Celebration of the Arts. Their initial goal was to help foster an appreciation of jazz and its relationship to other artistic disciplines. Each year, the organization hosts the Celebration of the Arts Festival in the town of Delaware Water Gap in September.
Phil Woods A Life in E Flat-Portrait of a Jazz Legend is a documentary film released in 2005 by Jazzed Media. Directed by Rich Lerner, and produced by Graham Carter, the film offers an intimate portrait of Woods during a recording session of the Jazzed Media album This is How I Feel About Quinc