Koontz was born on July 9, 1945, in Everett, Pennsylvania, the son of Florence (née Logue) and Raymond Koontz. He has said that he was regularly beaten and abused by his alcoholic father, which influenced his later writing, as also did the courage of his physically diminutive mother in standing up to her husband. In his senior year at Shippensburg State College, he won a fiction competition sponsored by Atlantic Monthly magazine. After graduation in 1967, he went to work as an English teacher at Mechanicsburg High School in Mechanicsburg, Pennsylvania. In the 1960s, Koontz worked for the Appalachian Poverty Program, a federally funded initiative designed to help poor children. In a 1996 interview with Reason magazine, he said that while the program sounded “very noble and wonderful, … [i]n reality, it was a dumping ground for violent children … and most of the funding ended up ‘disappearing somewhere.'” This experience greatly shaped Koontz’s political outlook. In his book, The Dean Koontz Companion, he recalled that he

In his spare time, he wrote his first novel, Star Quest, which was published in 1968. Koontz went on to write over a dozen science fiction novels. Seeing the Catholic faith as a contrast to the chaos in his family, Koontz converted in college because it gave him answers for his life, admiring its “intellectual rigor” and saying it permits a view of life that sees mystery and wonder in all things. He says he sees Catholicism as English writer and Catholic convert G. K. Chesterton did: that it encourages a “joy about the gift of life”. Koontz says that spirituality has always been part of his books, as are grace and our struggle as fallen souls, but he “never get[s] on a soapbox”.

After writing full-time for more than 10 years, Koontz’s acknowledged breakthrough novel was Whispers, published in 1980. The two books before that, The Key to Midnight and The Funhouse, also sold over a million copies, but were written under pen names. His first bestseller was Demon Seed, the sales of which picked up after the release of the film of the same name in 1977, and sold over two million copies in one year. His first hardcover bestseller, which finally promised some financial stability and lifted him out of the midlist hit-and-miss range, was his book Strangers. Since then, 12 hardcovers and 14 paperbacks written by Koontz have reached number one on The New York Times Best Seller list.

Koontz has stated on his Web site that he used only the ten known pen names and “there are no secret pen names used by Dean”; he adds that his own identity was stolen by “a person he had previously worked with professionally”, who submitted letters and some articles to fanzines under Koontz’s name between 1969 and at least the early 1970s. Koontz has stated that he was only made aware of these bogus letters and articles in 1991 in a written admission from the identity thief. He has stated that he will reveal this person’s name in his memoirs.

In 1997, psychologist Katherine Ramsland published an extensive biography of Koontz based on interviews with his family and him. This “psychobiography” (as Ramsland called it) often showed the conception of Koontz’s characters and plots from events in his own life.

In 2004, Koontz wrote and edited Life Is Good: Lessons in Joyful Living in her name, and in 2005, Koontz wrote a second book credited to Trixie, Christmas Is Good. Both books are written from a supposed canine perspective on the joys of life. The royalty payments of the books were donated to CCI. In 2007, Trixie contracted terminal cancer that created a tumor in her heart. The Koontzes had her put to sleep outside their family home on June 30. After Trixie’s death, Koontz has continued writing on his website under the name “TOTOS”, standing for “Trixie on the Other Side”. Trixie is widely thought to have been his inspiration for his November 2007 book, The Darkest Evening of the Year, about a woman who runs a Golden Retriever rescue home, and who rescues a “special” dog, named Nickie, which eventually saves her life. In August 2009, Koontz published A Big Little Life, a memoir of his life with Trixie.

Many of his novels are set in and around Orange County, California. As of 2006, he lives there with his wife, Gerda (Cerra), in Newport Coast, California, behind the gates of Pelican Hills. In 2008, he was the world’s sixth-most highly paid author, tied with John Grisham, at $25 million annually.

In October 2008, Koontz revealed that he had adopted a new dog, Anna. Eventually, he learned that Anna was the grandniece of Trixie. Anna died on May 22, 2016. Koontz then adopted a new dog, Elsa, on July 11, 2016.

In 2019, Koontz began publishing with Amazon Publishing. At the time of the announcement, Koontz was one of the company’s most notable signings.