Born in Hampstead, London, to Graham and Bette Hill, Damon Hill followed his father into motorsport. Graham Hill was a two-time Formula One World Champion, becoming a well-known personality in the United Kingdom, and Bette was a former rower and medalist at the European Rowing Championships. By 1975, the family lived in a "25-room country mansion" in Hertfordshire and Damon attended The Haberdashers' Aske's Boys' School. The death of his father in an aeroplane crash in 1975 left the 15-year-old Hill, his mother, and sisters Samantha and Brigitte in drastically reduced circumstances. He worked as a labourer and a motorcycle courier to support his further education.
Hill began his motorsport career in motorcycle racing in 1981, adopting the same helmet design as his father: eight white oar blades arranged vertically around a dark blue helmet, representing the London Rowing Club for which Graham Hill rowed in the early 1950s. He won a 350 cc clubman's championship at Brands Hatch, funded in part by working as a building labourer. He also worked as a dispatch rider for Apollo Despatch and later Special Delivery, a London motorcycle dispatch company, who provided him with TZ350 racing bikes.
Persuaded by his mother due to the dangers of motorcycle racing, Hill took a racing car course at the Winfield Racing School in France in 1983. He progressed through British Formula Ford, winning six races driving a Van Diemen for Manadient Racing in 1985, finishing third and fifth in the two UK national championships. He also took third place in the 1985 Formula Ford Festival, helping the UK win the team prize.
For 1986, Hill planned to move up to British Formula Three with West Surrey Racing, but lost sponsorship and then saw his proposed teammate Bertrand Fabi die in a testing accident. He secured funding through a sponsorship deal with Cellnet, facilitated by David Hunt, brother of James Hunt. He competed in Formula 3000 with GA Motorsport in 1988, and then with Mooncraft and Middlebridge Racing in 1989 and 1990 respectively, taking three pole positions but no wins. He also competed in a one-hour endurance race in the British Touring Car Championship at Donington Park in 1989, finishing fourth, and shared a Porsche 962 at Le Mans for Richard Lloyd Racing, where the engine failed after 228 laps.
Hill started his Grand Prix career in 1992 with the financially struggling Brabham team. He replaced Giovanna Amati after three races, qualifying for the British and Hungarian Grands Prix. He continued to test for Williams that year.
In 1993, Hill was unexpectedly promoted to the Williams race team alongside Alain Prost after Riccardo Patrese’s departure. As the reigning champion, Mansell, was not racing in Formula One in 1993, Williams were given numbers "0" and "2", with Hill taking "0". He achieved his first podium finish at the Brazilian Grand Prix and his first career win at the 1993 Hungarian Grand Prix, becoming the first son of a Formula One Grand Prix winner to take victory himself. He finished third in the 1993 championship.
The 1994 season was marked by the death of Ayrton Senna at the San Marino Grand Prix. Hill found himself team leader with limited top-flight experience. He won the British Grand Prix and four more races, taking the title battle to the final event at Adelaide. The Australian Grand Prix saw a controversial collision with Michael Schumacher, which handed the title to Schumacher. Hill explicitly accused Schumacher of causing the collision deliberately. His season earned him the 1994 BBC Sports Personality of the Year.
Hill was a title favourite in 1995, but Michael Schumacher won the championship. Hill and Schumacher had several on-track incidents during the season, resulting in suspended one-race bans for both. Hill won races in Brazil, Argentina and Monaco.
Hill won the 1996 Formula One World Drivers' Championship with Williams, becoming the first son of a Formula One champion to win the championship himself. He secured eight wins and never qualified off the front row. He equalled the record for starting all 16 races of the season from the front row, matching Ayrton Senna in 1989 and Alain Prost in 1993.
Hill was dropped by Williams for the 1997 season and joined Arrows. He achieved a podium finish at the Hungarian Grand Prix. In 1998, he moved to Jordan and secured their first win at the Belgian Grand Prix. He retired from racing after leaving Jordan following the 1999 season.
After retirement, Hill became president of the British Racing Drivers' Club (BRDC) in 2006, succeeding Jackie Stewart, and oversaw the securing of a 17-year contract for Silverstone to hold Formula One races. He later worked as part of the Sky Sports F1 broadcasting support team, providing expert analysis. Hill also founded the Prestige and Super Car Private Members Club P1 International and became involved in a BMW dealership. He has also appeared on various British television programmes, including Top Gear and This is Your Life. In February 2026, he rejoined Williams as an official ambassador.
Hill has participated in events at the Goodwood Festival of Speed and tested various racing vehicles, including GP2 Series cars and a Mercedes DTM car. He has also been involved with charity work, serving as a patron of Disability Africa and St. Joseph's Specialist School and College. He published his autobiography, Watching the Wheels, in 2016, in which he revealed he had suffered with depression. He also played guitar with Pat Cash's Wild Colonial Boys and appeared on Def Leppard’s 1999 album Euphoria.