Skaife began karting in New South Wales in the 1980s and moved to Melbourne to serve an apprenticeship under team owner Fred Gibson. His first car race was at Amaroo Park in 1984 in a Holden Torana XU-1. After competitive seasons in the NSW and Victorian Ford Laser series, he graduated to the 1987 Australian 2.0 Litre Touring Car Championship in a Gibson Motorsport Nissan Gazelle, which he won. His debut at the Bathurst 1000 that same year produced a 19th-place finish, though the result was shadowed by persistent rumours — later confirmed by Gibson — that Skaife had driven under a co-driver's name during qualifying, disguised in the co-driver's suit and helmet to post the required time.
During 1991 to 1993, Skaife won three consecutive Australian Drivers Championships and earned three CAMS Gold Stars in formula racing alongside his touring car commitments, demonstrating a versatility that set him apart from most of his touring car contemporaries.
Skaife joined the Gibson Nissan works squad full-time in 1990. In 1991 he partnered Jim Richards to take a dominant Bathurst 1000 victory in the Nissan Skyline GT-R R32 — the first Japanese car to win Bathurst — and repeated the achievement in 1992 in similarly wet conditions. He won the ATCC outright in 1992 and 1994, and by 1998 he had moved to the Holden Racing Team to replace the retiring Peter Brock.
His HRT years produced some of his finest driving. In 2000 and 2001 he claimed back-to-back Shell Championship Series titles. The 2001 season brought a third Bathurst 1000 triumph, this time alongside Tony Longhurst. A fourth Bathurst win followed in 2002 with former co-driver Jim Richards, part of a dominant V8 Supercars Championship Series campaign in which Skaife won seven of thirteen rounds including the opening five in succession.
Skaife secured his fifth and final drivers' title in 2002. Subsequent seasons brought a fifth Bathurst 1000 victory in 2005 with Todd Kelly, but championship results became more modest as the field around him grew more competitive. He retired from full-time competition after the 2008 season, having accumulated 482 race starts, 90 race wins, 41 pole positions and five championship titles.
Skaife did not walk away from the circuit entirely. Between 2009 and 2011 he returned as an endurance co-driver. Partnering Craig Lowndes at TeamVodafone, he won both the Phillip Island 500 and the Bathurst 1000 in 2010, adding a sixth Bathurst win to his record, and took a further Phillip Island 500 victory in 2011.
In 2004 he was named as owner of the Holden Racing Team following the collapse of founding owner Tom Walkinshaw Racing, before later selling his stake back to Walkinshaw.
In 2004 Skaife was awarded the Medal of the Order of Australia for services to motor racing and charity. In 2006 he set a Guinness World Record for the fastest speed by a production utility vehicle, recording 277.16 km/h at the wheel of an HSV Maloo. In 2024 he was inducted into the Sport Australia Hall of Fame.
After retiring from full-time driving, Skaife joined the Seven Network as a V8 Supercars commentator alongside Neil Crompton and Matthew White, continuing until the broadcaster lost the series rights after the 2014 season. He subsequently moved to Fox Sports, where he took on both commentary and presenting roles, including as co-host of the television series Inside Supercars. He also served as chairman of the V8 Supercars Commission from late 2011.
Outside broadcasting, Skaife became director of motorsport for design and engineering consultancy IEDM, which oversaw the reconfiguration of Melbourne's Albert Park Circuit. He has published four books chronicling his racing career, the most comprehensive being Mark Skaife: The Complete Illustrated Autobiography in 2020.