Monette was born in Lawrence, Massachusetts, and graduated from Phillips Academy in 1963 and Yale University in 1967. Conflicted about his sexual identity, he moved to Boston, Massachusetts, where he taught writing and literature at Milton Academy for a number of years before moving to West Hollywood, a neighbourhood in Los Angeles which has a large population of gay men, in 1978 with his romantic partner, lawyer Roger Horwitz. Monette's most acclaimed book, Borrowed Time, chronicles Horwitz's fight against and eventual death from AIDS. His 1992 memoir, Becoming a Man: Half a Life Story, tells of his life in the closet before coming out, culminating with his meeting Horwitz in 1974. Becoming a Man won the 1992 National Book Award in the nonfiction category. Monette also wrote the novelizations of the 1988 film Midnight Run, the 1979 film Nosferatu the Vampyre, the 1987 film Predator and 1983 film Scarface.

Monette's last years, before his own AIDS-related death, are chronicled in the film named after him, Paul Monette: On the Brink of Summer's End by Monte Bramer and Lesli Klainberg. "By the end of his life, Monette had healed most of his psychic wounds, but his rage persisted."Monette died in Los Angeles, California, where he lived with his partner of five years, Winston Wilde. Monette was survived by his lover, Winston Wilde; his father, Paul Monette Sr., and his brother, Robert Monette who remains the appointed Trustee of the Monette Horwitz Trust.