As a child, young Pete was very sickly, frequently battling respiratory infections due to weakened lungs. He was given expensive medication but it proved to be not very effective. During a pharmacy visit, Pete's father began a discussion with a neighborhood doctor who was also there shopping and talked with him about his son's condition. The doctor agreed to see the boy the following day. After a short exam, the doctor confirmed the weak lung condition and advised the father to try an unorthodox treatment: purchase the child a musical instrument, anything he has to blow into. The same day, they went to a local music store and, given his choice of instruments, Pete chose the clarinet (after first wanting the drums, which his father declined per the doctor's orders). At first, Pete was unable to produce a sound from the instrument, but he continued to practice and eventually not only made sounds and eventually music, but greatly improved the health of his lungs.
He took private lessons but also learned to play jazz by playing along with phonograph records of first Benny Goodman and then Irving Fazola. Early on he played with the bands of Monk Hazel and Al Hirt. Fountain founded The Basin Street Six in 1950 with his longtime friend, trumpeter George Girard .
Fountain's clarinet work is noted for his sweet fluid tone. He recorded over 100 LPs and CDs under his own name, some in the Dixieland style, many others with only peripheral relevance to any type of jazz.
The distinctive Fountain sound — more woody than most — came from the crystal mouthpieces he has played with since 1949. His first crystal mouthpiece was actually Irving Fazola's, given to Pete by Fazola's mother after Faz's death, because she had heard him play and noted how he played like her son. That mouthpiece was shattered on the bandstand one night when Pete had played his solo and was standing by as trumpeter George Girard played his [own solo], and Girard brought his trumpet down suddenly on top of the mouthpiece. Pete still has the shattered mouthpiece, and has played other crystal mouthpieces ever since.
Fountain led the Pete Fountain Quintett, a New Orleans French Quarter jazz band of Fountain and his Creole-style music. The "Quintett" had many musicians over the years, but has primarily recorded with Jack Sperling on drums, bassists Don Bagley or Morty Corb, vibeist Godfrey Hirch, and pianists Merle Kock or Stan Wrightsman.