After graduating from the College of the Holy Cross, Shaughnessy began his career as a beat reporter covering the Baltimore Orioles for the Baltimore Sun in 1977. He has been a sports writer for the Boston Globe for 20 years serving as the beat writer for the Boston Celtics and the Boston Red Sox.

Shaughnessy has authored or contributed to several sports-related books, including on the fierce Yankees — Red Sox rivalry. His book, The Curse of the Bambino, details the travails of the Boston Red Sox and their search for a World Series championship after selling Babe Ruth to the New York Yankees. (Much of his hypothesis was debunked in novelist Jerry M. Gutlon's subsequent book, It Was Never About the Babe.) He subsequently wrote Reversing the Curse after the Red Sox won the World Series in 2004.

He is a contributor to ESPN The Magazine, and a regular guest on a Sunday night sports show, "Sports Xtra". Shaughnessy discusses sports and current events on radio shows airing on WTKK; on ESPN's Rome Is Burning; and on NESN's SportsPlus and Globe 10.0.On July 9, 2008, he made his debut as a guest host on the ESPN show Pardon the Interruption.He has a weekend radio show on WBZ-FM alongside Adam Jones.

Known by Red Sox fans (and some players) as being overly negative and critical, he earned the pejorative nickname "Curly-Haired Boyfriend" from former Red Sox player Carl Everett. The Dan Shaughnessy Watch blog dedicated to critiquing his work was launched in 2005.

In an October 2005 column he revealed information detailing the relationship between Theo Epstein and Red Sox CEO Larry Lucchino. Shaughnessy and other Globe writers have been accused by writers at the Boston Herald of routinely reporting information leaked from the Red Sox front office (the Red Sox are 17 percent-owned by The New York Times Company, the Globe's parent company). Then-Boston Herald columnist Tony Massarotti accused Red Sox management of smearing Epstein and suggested the Globe's coverage of the negotiations may be conflicted because of the Times ownership in the team. In the weeks leading up to Epstein's decision, Sox owner John Henry himself said the leaks "had to stop".