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Albini was born in Pasadena, California, to Gina (nee Martinelli) and Frank Addison Albini. His father is a wildlife researcher. He also has two siblings. In his youth, Albini's family moved often, before settling in the college town of Missoula, Montana in 1974.

Albini formed Shellac in 1992. With bandmates Bob Weston (formerly of Volcano Suns), and Todd Trainer (of Rifle Sport, Breaking Circus and Brick Layer Cake), they initially released three EPs: The Rude Gesture: A Pictorial History (1993), Uranus (1993) and The Bird Is the Most Popular Finger (1994)--the first two EP releases were on Touch and Go, while the third EP was a Drag City label release.  Two years after formation, the Japanese label NUX Organization released a Japan-exclusive live album in CD format titled raivuinDong Jing --an English-language reference to the name Shellac cannot be found anywhere on the CD product, which was not available outside Japan. The live album was followed by five studio albums: At Action Park (1994), Terraform (1998), 1000 Hurts (2000), Excellent Italian Greyhound (2007) and Dude Incredible (2014). All of Shellac's studio albums were released on vinyl as well as CD.  Albini explained in 2010 that Shellac had made a decision early in their existence that they would not play at festivals and this position was articulated to All Tomorrow's Parties (ATP) festival organizer Barry Hogan during the preparation stage of the inaugural ATP event. However, Scottish band Mogwai managed to convince Albini at the time that they were ATP curators and the band was very impressed by the experience: "They (ATP) completely changed the festival game. Now the whole world has to operate under the knowledge that there are these cool, curated festivals where everyone is treated well and the experience is a generally pleasant one."
Steve Albini