Spencer followed his father Ed Spencer Sr. — known as "Fast Eddie" — into racing and started driving Late Models in Pennsylvania, capturing his first win in the Late Model division at Port Royal Speedway in 1976. He moved to NASCAR Modifieds at Shangri-La Speedway in Owego, New York, and expanded his schedule throughout the Northeast. In 1984 he ran over sixty Modified races and finished second to Richie Evans in the NASCAR National Modified Championship standings. When NASCAR restructured the championship into the smaller-schedule Winston Modified Tour in 1985, Spencer continued to compete and won the title in both 1986 and 1987, cementing his standing as one of Modified racing's top competitors.
Spencer debuted in the Busch Series in 1985 and ran his first full season in 1988, posting five top-fives and thirteen top-tens to finish seventh in points. In 1989 he won three Busch races including the Mountain Dew 400 at Hickory Motor Speedway. He later won two more Busch races in 1992 at Myrtle Beach Speedway and Orange County Speedway while driving for Dick Moroso after Travis Carter's Cup team folded early that season. His final Busch win came in 2002 at Bristol driving for Phoenix Racing.
Spencer entered the Winston Cup Series in 1989, initially with Buddy Baker's team before moving to Rod Osterlund Racing and then Travis Carter Motorsports. His career-best Cup standing came in 1993 when he finished twelfth in points with five top-five finishes driving Bobby Allison Motorsports' No. 12 Meineke Ford Thunderbird.
The pinnacle of his Cup career arrived in 1994 driving the No. 27 McDonald's Ford for Junior Johnson. On the final lap of the Pepsi 400 at Daytona, Spencer passed Ernie Irvan — leading the race for the first and only scored lap of his career — to win his first Cup race. He followed that win with victory in the DieHard 500 at Talladega. Outside those two triumphs, the season yielded only two more top-ten finishes and he ended the year 29th in points.
Spencer rejoined Travis Carter and the No. 23 Smokin' Joe's Ford from 1995 onward, posting a career-high fifteenth-place points finish in 1996 with two top-five results. He reached eleventh in points in 1998 before injuries at the Brickyard 400 forced him to miss races. He joined Chip Ganassi Racing in 2002, driving the No. 41 Target Dodge, but was released at season's end following an incident with Kurt Busch at Bristol and a subsequent lawsuit against the Ganassi organization.
Spencer's time with Ultra Motorsports in 2003 brought further conflict with Kurt Busch. After an on-track altercation at Michigan, Spencer confronted Busch while Busch was still seated in his car, earning a one-race suspension. Despite the drama, Spencer collected four top-tens that season and finished 29th in points. He also won a Craftsman Truck Series race at New Hampshire International Speedway that year, making him one of the rare drivers to win in all three of NASCAR's national series.
His final Cup starts came in 2006 at Pocono for Furniture Row Racing. Spencer then transitioned fully to broadcast work on Speed Channel, co-hosting the NASCAR RaceDay pre-race show and NASCAR Victory Lane post-race show. He became known for his "Crying Towel" commentary segment. He announced his retirement from driving via social media in May 2012 and departed NASCAR on Fox (formerly Speed) after the 2013 season.
Spencer represented a generational bridge between grassroots Northeast Modified racing — where he was genuinely dominant — and the NASCAR Cup Series. His aggressive style generated both admiration and controversy throughout his career, and the nickname Mr. Excitement followed him from the short-track ranks all the way to Daytona and Talladega.