After completing his university studies in sociology in Frankfurt and Bremen, Dieterich moved to Latin America. Since 1977 he has been a professor in sociology and methodology at the Universidad Autónoma Metropolitana in Mexico, D.F.. Since then he has shown a lot of interest in politics and social movements in Latin America, and documented a great deal of their activity.

He is considered one of the most important figures in the "New School of Bremen" in sociology, constituted by Arno Peters, Carsten Stahmer, and the Cuban physicist Raimundo Franco. This school implements principles of cybernetics, quantum mechanics and the "principle of equivalence" to sociology. In 1996, Steffan contributed to the creation of the alternative information website Rebelion.org, where he contributes regularly.

Steffan’s contributions represent one of the most relevant references to analyse the theoretical and practical implications of the Marxist anticapitalist leftist movements that followed the fall of the USSR. His contributions suggest an alternative economic, political and social project, which the alter-globalistic movements lacked during the 1990’s.

In his book The Socialism of the 21st century, Steffan explains the theoretical basis of the new socialism, which finds its most practical application in the revolutionary process of Venezuela, and to a lesser extent in the neighbouring countries of Bolivia and Ecuador. Dieterich is an advisor of the Venezuelan government.

Some of his most important books are “Global Society” and “Latin America: From Colonization to Globalization”, which he wrote in cooperation with Noam Chomsky.

His ideas have raised several controversies especially in Venezuela. The Marxist theoretician Alan Woods has written a whole book against his allegedly reformist positions, Reformism or Revolution - A Reply to Heinz Dieterich.