Tim is a third generation bounty hunter, and both of his parents worked in the bail bondsman profession. His mother Diane was a bondswoman in Colorado and was known for her trademark slogan “Let a Blond Write Your Bond.” At two and a half years of age, his parents separated and filed for divorce. Chapman would stay with his grandparents in Ventura for a few years, alongside his brother, Russell J. Chapman.

In his teenage years he moved to Denver, Colorado, where he learned the bondsman trade while working with his mother. He went to work at ABC Bail Bonds, his maternal grandparents' company. He has claimed he made his first arrest at only fourteen years of age.

During this time, he met Duane “Dog” Chapman, who was no relation despite sharing a surname. However, Duane would eventually refer to Tim as his "blood brother" and treat him as part of his own family. Tim also became close with Dog’s longtime girlfriend, Beth Smith, and his son Leland.

Tim later moved to Hawaii with Dog and his family, where they started the Da Kine Bail Bonds company. They spent the next few years hunting down fugitives and gained a lot of notoriety in their industry for their successful high-profile captures. This caught the attention of the entertainment industry, and Duane and Tim were approached by the A&E Network to film their company's work for a new reality show. In 2004, Dog the Bounty Hunter first aired on A&E, and the instant success of the show brought instant fame to both Tim and Duane. Tim appeared over the course of four seasons and became a popular figure on the show. During Season Five he went on hiatus, supposedly to focus on raising his children. However, it was rumored that his real reason for leaving was due to fallout from his two arrests during the show's production run.

Tim and his co-stars, Duane and Leland, were arrested in 2006 by US Federal Marshals at the request of Mexican authorities. After their extradition to Mexico, they were charged with deprivation of liberty. This incident was due to the trio’s attempt to bring in Andrew Luster, a serial rapist and heir to the Max Factor Cosmetics empire. After apprehending Luster, all three were caught and arrested in Puerto Vallarta by local police. However, the trio was able to post bail of approximately $100,000 each, and make their way back to the States. After failing to appear for their July 2003 court date, they were arrested in Hawaii by Federal Marshals and fitted with electronic ankle bracelets.

Their passports were confiscated so they could not flee the country before their extradition to Mexico, where they faced trial and a potential four-year sentence. In August 2007, it was announced that all three men had been acquitted. A&E representatives revealed that the charges were dropped due to the expiration of the statute of limitations, which effectively canceled all pending charges. Mexican prosecutors appealed the ruling, but a US judge in Honolulu dismissed the extradition attempt since there were no longer any charges against the three men.