Disch was born in Des Moines, Iowa, on February 2, 1940. Because of a polio epidemic in 1946, his mother Helen home-schooled him for a year. As a result, he skipped from kindergarten to second grade. Disch's first formal education was at Catholic schools; which is evidenced in some of his works which contain scathing criticisms of the Catholic Church. The family moved in 1953 to the Twin Cities area in Minnesota – rejoining both pairs of grandparents – where Disch attended both public and Catholic schools. In Minneapolis public schools, Disch discovered his long-term loves of science fiction, drama, and poetry. He describes poetry as his stepping-stone to the literary world. A teacher, Jeannette Cochran, assigned 100 lines of poetry to be memorized and Disch wound up memorizing ten times as much. His early fascination continued to influence his work with poetic form and the direction of his criticism.

After graduating from high school in 1957, he worked a summer job as a trainee steel draftsman, just one of the many jobs on his path to becoming a writer. Saving enough to move to New York City at the age of 17, he found a Manhattan apartment and began to cast his energies in many directions. He worked as an extra including as an extra in productions of Swan Lake and Don Giovanni at the Metropolitan Opera House, then at a bookstore, then for a newspaper. Just when he seemed to be getting work closer to his love of language, he turned 18 and enlisted in the army. Disch's incompatibility with the armed forces quickly resulted in a nearly three-month commitment to a mental hospital.

After his discharge, Disch returned to New York and continued to pursue the arts in his own indirect way. He worked, again, in bookstores, and as a copywriter. Some of these jobs paid off later; working as a cloak room attendant in New York theater culture allowed him to both pursue his life-long love of drama and led to work as a magazine theater critic. Eventually, he got another job with an insurance company and went to school. A brief flirtation with architecture school led him to night school at New York University (NYU), where classes on novella writing and utopian fiction developed his tastes for some of the common forms and topics of science fiction. In May 1962, he decided to write a short story instead of studying for his midterm exams. He sold the story, "The Double Timer", for $112.50, to the magazine Fantastic. Having begun his literary career, he did not return to NYU but rather took another series of odd jobs such as bank teller, mortuary assistant, and copy editor - all of which served to fuel what he referred to as his night-time "writing habit". Over the next few years he wrote more science fiction stories, but also branched out into poetry; his first published poem, "Echo and Narcissus", appeared in the Minnesota Review's Summer 1964 issue. He published his first novel, The Genocides, in 1965.

Disch entered the field of science fiction at a turning point, as the pulp adventure stories of its older style began to be challenged by a more serious, adult, and often darker style. This movement, called New Wave, tried to show that the ideas and themes of science fiction could be developed past the simple desires of an audience of twelve-year-olds. Rather than trying to compete with mainstream writers on the New York literary scene, Disch plunged into the emerging genre of science fiction, and began to work to liberate it from some of its strict formula and narrow conventions. His first novel, The Genocides, appeared in 1965. Much of his more literary science fiction was first published in English author Michael Moorcock's New Wave magazine, New Worlds.

Disch was widely traveled and lived in England, Spain, Rome, and Mexico. In spite of this, he remained a New Yorker for the last twenty years of his life. He said that "a city like New York, to my mind, is the whole world", keeping a long-time New York Residence overlooking Union Square.

Writing had become the dominant focus of his life. Disch described his personal transformation from dilettante to "someone who knows what he wants to do and is so busy doing it that he doesn't have much time for anything else." After The Genocides, he wrote Camp Concentration and 334. More books followed, including science fiction novels and stories, gothic works, criticism, plays, a libretto for an opera of Frankenstein, prose and verse children's books such as A Child's Garden of Grammar, and ten poetry collections. In the 1980s, he moved from science fiction to horror, with a series of books set in Minneapolis: The Businessman, The M.D., The Priest, and The Sub.

His writing includes substantial freelance work, such as regular book and theater reviews for The Nation, The Weekly Standard, Harper's, The Washington Post, The Los Angeles Times, The New York Times, the Times Literary Supplement, and Entertainment Weekly. Recognition from his award-winning books led to a year as "artist-in-residence" at William and Mary College. During his long and varied career, Disch found his way into other forms and genres. As a fiction writer and a poet, Disch felt typecast by his science fiction roots. "I have a class theory of literature. I come from the wrong neighborhood to sell to The New Yorker. No matter how good I am as an artist, they always can smell where I come from."

Though Disch was an admirer of and was friends with the author Philip K. Dick, Dick would write an infamous paranoid letter to the FBI in 1974 that denounced Disch and suggested that there were coded messages in Disch's novel Camp Concentration. Disch was unaware and he would go on to champion the Philip K. Dick Award.

He maintained an apartment in New York City, sharing it and a house in Barryville, New York, with his partner of three decades, poet Charles Naylor. Disch's private life remained private, for the most part. He was publicly gay since 1968; this came out occasionally in his poetry and particularly in his 1979 novel On Wings of Song. He did not try to write to a particular community: "I'm gay myself, but I don't write 'gay' literature." He rarely mentioned his sexuality in interviews, though he was interviewed by the Canadian gay periodical The Body Politic in 1981. After Naylor's death in 2005, Disch had to abandon the house, as well as fight attempts to evict him from his rent controlled apartment