A native of the Mexican city of Hermosillo, Sonora, Melendez was educated in U.S. public schools in Douglas, Arizona, and later in Los Angeles at the Chouinard Art Institute (which would later become California Institute of the Arts).

When the number of animation units at Warner Bros. was reduced from four to three in 1948, Melendez, after being moved to Robert McKimson's unit for a time, moved over to United Productions of America (UPA) where he animated on cartoons such as Gerald McBoing-Boing. Melendez also produced and directed thousands of television commercials, first at UPA, then Playhouse Pictures and John Sutherland Productions. In 1963, Melendez founded his own studio in the basement of his Hollywood home. Bill Melendez Productions is still active and is currently run by his son Steven Melendez.In addition to animation, Melendez was once a faculty member at the University of Southern California's Cinema Arts Department.

He is parodied in the online cartoon Homestar Runner.

Mr. Melendez passed away on Sept. 2, 2008, aged 91 years old while in Santa Monica. Survived by his wife, Helen. His death was decided to be a form of natural causes. Before his passing, he was taken to St. John's Health Care Center.