Lake began playing drums as a child in St. Louis. He first picked up the saxophone at the age of 18. Lake received his bachelor's degree in 1968 from Lincoln University. From the late '60s to the early '70s he taught school, played in various contexts around St. Louis, and led -- along with Julius Hemphill and Charles "Bobo" Shaw, among others -- a musicians' collective, the Black Artists' Group (BAG). Lake lived in Paris from 1972-1974, where he worked in a quintet comprised of fellow BAG members. By 1975, he had (along with most of his BAG colleagues) moved to New York, where he became active on what was called by some the "loft jazz" scene. In 1976, with Hemphill, Hamiet Bluiett, and David Murray, he founded the World Saxophone Quartet. Over the next two decades, that band reached a level of popularity perhaps unprecedented by a free jazz ensemble. Its late-'80s albums of Ellington works and R&B tunes attracted an audience that otherwise might never have found its way to such an esoteric style.

Lake continued working as a leader apart from the WSQ, making excellent small-group albums in the '70s and '80s for Arista/Freedom and Black Saint. In the '80s, Lake led a reggae-oriented band, Jump Up, that had a significant degree of pop success, though its artistic appeal faded in comparison with his jazz work. In the '90s, Lake continued to stretch creatively; a duo album with classically trained pianist Donal Fox set him free to explore the more fanciful side of his musical personality. Late-'90s concerts with the WSQ, his own groups, and such duo mates as the hyper-dextrous pianist Borah Bergman showed that Lake was still on top of his game.

The saxophonist continued performing and recording as both a leader and collaborator into the 21st century, forming Trio 3 with bassist Reggie Workman and drummer Andrew Cyrille (releasing such albums as 2002's Open Ideas on Palmetto and 2008's Berne Concert [in collaboration with pianist Irène Schweizer] and 2009's At This Time [in collaboration with Geri Allen] on Intakt); recording with the String Trio of New York (2005's Frozen Ropes on Barking Hoop); and issuing such recordings as Cloth by the Oliver Lake Big Band in 2003, Oliver Lake Quartet Live (featuring Dine' [Navaho tribe] vocalist and flutist Mary Redhouse) in 2006, and Makin' It by the Oliver Lake Organ Trio in 2008 (the latter three Lake-led sessions released by the Passin' Thru label).