Dreiser grew up in Indiana, in a state of poverty, with nine siblings. By the time he was 12 the family moved to Chicago, his tenth residence. He eventually moved back to Indiana, where a former teacher offered to pay his tuition to Indiana University. He lasted only a year and then held several jobs, including driving a laundry truck, canvassing for a failed real estate agency, and working as a collections agent for delinquent accounts. His dream had always been to be a newspaper reporter and he eventually got a job at the Daily Globe in Chicago. The City Editor there found a position for him in St. Louis at the Globe-Democrat in 1892. There he was assigned the night crime beat. He was fired from the Globe Democrat after writing reviews for three plays that never performed. He then got a job at the Republic.

He went to New York City in 1894, where he began a career in publishing, eventually rising to the presidency of Butterick Publications. His first novel, Sister Carrie (1900), the story of a country girl´s rise to material success as the mistress of a wealthy man and as an actress, horrified its publisher, who gave it only limited circulation. Dreiser distributed it himself, with limited success.

His second novel, Jennie Gerhardt (1911), again about a "fallen woman," met with a better response. Its success allowed Dreiser to work as a writer full time. With these two works, Dreiser started his long battle for the right of the novelist to portray life as he sees it. Among his other works are The Financier (1912), The Titan (1914), The Stoic (1947), The Genius (1915), The Bulwark (1946), An American Tragedy (1925), Free (1918), Chains (1927), and A Gallery of Women (1929).

In his later life Dreiser became interested in socialism, visiting the Soviet Union as a guest of the government and writing his perceptions in Dreiser Looks at Russia (1928) and Tragic America (1931).