Baekeland was born in Ghent and educated at the university there, graduating in 1884. He was professor of physics and chemistry at Bruges in 1887 and returned to Ghent the next year as assistant professor of chemistry. But Baekeland grew impatient with academic life and in 1889 a honeymoon tour took him to America where he settled.

Baekeland worked at first as a photographic chemist and in 1891 he opened his own consulting laboratory. In 1893 he began to manufacture a photographic paper, which he called Velox, and six years later his company was bought out by the Kodak Corporation for one million dollars. Now financially independent, Baekeland returned to Europe to study at the Technical Institute at Charlottenburg.

On his return to America, Baekeland began to investigate, as a synthetic substitute for shellac, the phenol–formaldehyde resins discovered by Karl Baeyer in 1871. Since nothing remotely like shellac emerged, he began to look for other uses for this material. By choosing suitable reaction conditions he produced a hard amberlike resin, which could be cast and machined and which had excellent durability and electrical properties. Bakelite was finally unveiled in 1909, when Baekeland set up the General Bakelite Corporation.

In 1922 Baekeland's company merged with two rivals and in 1939 it became a subsidiary of the Union Carbide and Carbon Corporation. Baekeland continued to produce scientific papers throughout this period. He received many honors and held many professional posts, including that of president of the American Chemical Society.