Hoffman was born in New York City. During World War II, he served in the Army Air Corps, where he served stateside as a technical writer and as the editor of an aeronautical research journal, experiences detailed in his memoir Zone of the Interior. He was educated at Columbia University, earning a B.A. (1947), an M.A. (1949), and a Ph.D. (1956).

In 1954, Hoffman published his first collection of poetry, An Armada of Thirty Whales. This collection was chosen by W. H. Auden as part of the Yale Series of Younger Poets, and Auden commended it in his introduction as "providing a new direction for nature poetry in the post-Wordsworthian world." He has since published ten additional collections of poetry, a memoir, and seven volumes of criticism. Reviewing Beyond Silence in The New York Times Book Review in 2003, Eric McHenry found Hoffman a poet of remarkable consistency, "no less joyful or engaged at 80 than he was at 25."

Hoffman has taught at Columbia University, Swarthmore College, and the University of Pennsylvania. He retired from the latter as Felix Schelling Professor of English Emeritus, and its Philomathean Society in 1996 published an anthology of poetry in honor of his efforts to bring contemporary poets to give readings in their halls. He is a chancellor emeritus of the Academy of American Poets. From 1988 to 1999, he served as Poet in Residence at the Cathedral of St. John the Divine in New York City, where he administered the American Poets' Corner.

Awards Hoffman has won include the Hazlett Memorial Award, the Aiken Taylor Award for Modern American Poetry from The Sewanee Review, the Memorial Medal of the Maygar P.E.N. for his translations of contemporary Hungarian poetry, the 2005 Arthur Rense Poetry Prize "for an exceptional poet" from the American Academy of Arts and Letters, and several grants and fellowships, including those from the Guggenheim Foundation and the National Endowment for the Humanities. He received an honorary degree from Swarthmore College in 2005.

Hoffman was married for fifty-seven years to Elizabeth McFarland (1922—2005), a poet herself as well as the poetry editor of Ladies' Home Journal, from 1948 until that magazine stopped publishing verse in 1961. In 2008 Orchises Press brought out a selection of McFarland's poems, Over the Summer Water, with an introduction by Hoffman, who continues to live in Swarthmore, Pennsylvania. Hoffman bears an uncanny facial resemblance to Edgar Allan Poe, about whom he wrote an intriguing study worthy of the master himself.

Daniel Hoffman was one of the named plaintiffs in "Authors Guild vs. Google" (2005), the purpose of which was to prevent Google from providing a complete searchable index of extant books.