Speed grew up in Jackson, Mississippi, where his father Leland S. Speed served as mayor starting in 1948, the same year Lake was born. He was named after his father's best friend. Speed began racing karts at age thirteen against the wishes of his family and went on to win the International Karting Federation National Championship six times. His 1978 World Karting Championship victory over an 18-year-old Ayrton Senna made him the first American to claim that title, a distinction he held until Logan Sargeant won the KFJ World Karting Championship in 2015.
Speed entered NASCAR Winston Cup competition in 1980, running as an owner-driver and finishing eighth at Darlington Raceway in just his third start. He posted a second-place finish in the 1980 rookie standings behind Jody Ridley. Speed ran his own operation through the early part of the decade, showing occasional flashes of front-running pace at tracks like Talladega Superspeedway and Charlotte Motor Speedway.
In 1983, while driving for Hoss Ellington, Speed experienced a pivotal moment at Talladega — leading late only to be beaten by Richard Petty and Benny Parsons. The near-miss spurred a personal transformation; Speed became a devout Christian in the days following the race and thereafter wore his faith openly throughout his career. His car number, 83, was later chosen to honor the year of that conversion.
The 1985 season was Speed's strongest to that point. Running for RahMoc Enterprises, he finished second to Bill Elliott in the Daytona 500, took the early points lead, and closed out the year tenth in the standings — his best championship result. The following year he lost his ride after just four races when the RahMoc team reorganized.
Speed rebuilt with his own team and a purple-and-white Oldsmobile numbered 83. Strong performances in 1987 attracted tire company Hoosier as a primary backer for 1988. On March 27, 1988, Speed won the TranSouth 500 at Darlington Raceway, his first and only Winston Cup victory. Starting eighth, he worked methodically to the front, led 178 of 367 laps, and beat Alan Kulwicki by half a straightaway. Speed's edge came from correctly predicting that Hoosier tires would not blister at Darlington, while most competitors expected them to fail.
A serious two-car accident at Pocono in 1989 kept Speed sidelined for several races, the first significant injury of his career. After a reduced 1990 schedule, he drove for Cale Yarborough's team in 1991 but struggled with mechanical failures. In 1993, Speed was called to fill in for Robert Yates Racing following the death of Davey Allison, qualifying fourth at Watkins Glen and posting a seventh-place finish at Michigan.
Speed joined Bud Moore Engineering for 1994 and enjoyed one of his most consistent seasons, recording top-fives at Darlington and Bristol early in the year and finishing eleventh in the points standings — his second-best championship result.
Speed moved to the resurgent Melling Racing team in 1995, where the car carried Spam sponsorship. That season produced what became his most widely remembered moment off the track: after the Miller Genuine Draft 400, Michael Waltrip confronted Speed in his pit stall, pulled down his window net, and threw punches at the helmeted driver. The altercation aired live on CBS and resulted in a $10,000 fine for Waltrip.
In 1996, Speed qualified third for the Brickyard 400 at Indianapolis Motor Speedway and led laps during the race. At Michigan's GM Goodwrench Dealer 400 he led seven laps and was positioned for a potential second career win before being caught in a crash started by Sterling Marlin.
The 1998 season proved Speed's last. Running with Cartoon Network sponsorship, he suffered a broken sternum in a practice accident at Sears Point after running over track debris, and missed several events. With no sponsor lined up and his injury aggravated in a subsequent race at New Hampshire, Speed chose to step back from full-time NASCAR competition.
In 2006, the International Kart Federation established the Lake Speed Achievement of Excellence Award in his honor, recognizing the sport's highest standards of sportsmanship and professionalism. Speed was inducted into the Mississippi Sports Hall of Fame on July 30, 2010. He continued to race karts in later years, winning four Historic Stock Car Racing Association events at Daytona's road course, and in November 2023 competed at Virginia International Raceway at age 75.