Lerman was born in Beverly Hills, California. His family is involved in orthotics and prosthetics. Lerman decided that he wanted to be an actor at the age of five. He subsequently appeared in two commercials, and made his film debut in 2000's The Patriot, playing William Martin, one of the children of Mel Gibson's character. The same year, he appeared in What Women Want, a hit comedy also starring Gibson. Lerman's next feature film roles were in 2001's Riding in Cars with Boys, playing the younger version of Adam Garcia's character, and in 2004's The Butterfly Effect, as a younger version of Ashton Kutcher's protagonist.
Lerman's role in the 2003 made-for-television film, A Painted House, won him a Young Artist Award for "Best Performance by a Leading Young Actor" in a television production. In 2004, he was cast in the television series, Jack & Bobby, playing the title role of Robert "Bobby" McCallister, destined in his future life to become President of the United States, and younger brother of Jack, who predeceases him. The show ran on The WB Television Network during the 2004–2005 season, and was subsequently canceled, though Lerman won another Young Artist Award for his performance.
Continuing his feature film work, Lerman appeared in Hoot, in which he played the lead role of Roy Eberhardt. The film opened on May 5, 2006 and netted him a third Young Artist Award win. This time for Best Performance in a Feature Film -Leading Young Actor (2007).
In 2007, Lerman appeared in The Number 23; in which he plays Robin Sparrow, the son of Jim Carrey's character, Walter Sparrow. That year, he also appeared in 3:10 to Yuma; where he plays William Evans, son of Dan Evans, played by Christian Bale. For his work in 3:10 to Yuma, Lerman was again nominated for the Young Artist Award - Best Performance in a Feature Film - Leading Young Actor (2008). It was the second consecutive year he received a nomination in that category, although this time he did not win.
In 2008, he played the role of "The Kid" in Meet Bill (Lerman's character is never referred to by name).
In the summer of 2009, Lerman appeared in the dystopian science-fiction film Gamer. He plays Simon, a teenage gamer who controls one of the characters in a video game played with live human subjects. The film's North American release came on September 4, 2009. He also has a leading role in the Renee Zellweger comedy feature My One and Only, playing a young George Hamilton.
Lerman is set to portray the character of Percy Jackson in the upcoming film Percy Jackson & the Olympians: The Lightning Thief based on the book by Rick Riordan.
Lerman became good friends with fellow actor Dean Collins, who played his best friend on Jack & Bobby, and they remained close after the series' cancellation; working together again on Hoot, where Collins had a supporting role.
In their spare time, the two collaborate on comedic short films. As well as acting, they write, direct, and shoot the videos; often enlisting the help of family and friends. The shorts are then uploaded to YouTube under the joint account name of "monkeynuts1069".
In 2006 Collins and Lerman have also formed a band, along with musician Daniel Pashman. Collins sings lead vocals, Lerman plays keyboard, and Pashman plays guitar and drums. At one point, the band had to change its name to Puzzles. Now it is back to its original name, Indigo.