Caesar was the youngest of three sons born to Jewish immigrants living in Yonkers, New York. His father was Max Ziser (1874-1946) and his mother was Ida (nee Raphael) (1887-1975). They likely were from Dabrowa Tarnowska, Poland. Reports state that the surname "Caesar" was given to Max, as a child, by an immigration official at Ellis Island.

Caesar died on February 12, 2014 at his home in Beverly Hills, California, at the age of 91, after a short illness.  On Caesar's death, Carl Reiner said, "He was the ultimate, he was the very best sketch artist and comedian that ever existed." Mel Brooks commented, "Sid Caesar was a giant, maybe the best comedian who ever practiced the trade. And I was privileged to be one of his writers and one of his friends." Jon Stewart and The Daily Show paid tribute to Caesar at the show's close on February 12, 2014. Vanity Fair republished a brief tribute written by Billy Crystal in August 2005, in which he said of Caesar and his contemporaries:  I get nervous when I am with these giants. I always feel like I want to say, Thank you. I am blessed to have grown up in their time of perfection, to have witnessed the utter force of Sid. Live, uncut, daring but not risque. Never stooping beneath themselves, Sid and this team of icons put forth a raucous, hilarious, and truthful brand of comedy that, 50 years later, is still funny and inspiring, and makes me think ... What kind of comedy would I be doing if I hadn't seen Sid Caesar? Would I be a comedian at all?  He was predeceased by his wife, Florence (2010) and survived by his children Karen, Michelle, and Rick, and two grandsons. His interment was at Mount Sinai Memorial Park Cemetery. He had 3 children: Karen, Michelle and Dr Richard (Rick) Caesar (died 2014).

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