Sedaris was born in Binghamton, New York, to Lou and Sharon (nee Leonard) Sedaris and grew up in Raleigh, North Carolina. He is of half-Greek-American descent. His mother was Protestant and his father was Greek Orthodox.

Sedaris was raised in a suburban section of Raleigh, North Carolina. He is the second child of six born to Sharon and Lou, an IBM engineer. His siblings, from oldest to youngest, are Lisa, Gretchen, Amy, Tiffany, and Paul. In his teens and twenties, he dabbled in visual and performance art. His lack of success is described in several of his essays. After graduating from Jesse O. Sanderson High School in Raleigh, Sedaris briefly attended Western Carolina University before transferring to and dropping out of Kent State University in 1977. He moved to Chicago, Illinois, in 1983, graduating from the School of the Art Institute of Chicago in 1987. (He did not attend Princeton University, although he spoke fondly of doing so in " What I Learned", a comic baccalaureate address delivered at Princeton in June 2006.)

While working a string of odd jobs across Raleigh, Chicago and New York City, Sedaris was discovered reading his diary (which he has kept since 1977) in a Chicago club by radio host Ira Glass, who asked Sedaris to appear on his weekly local program The Wild Room. Sedaris later said, "I owe everything to Ira....My life just changed completely, like someone waved a magic wand." Sedaris's success on The Wild Room led to his National Public Radio debut on December 23, 1992, when he read a radio essay on Morning Edition titled "SantaLand Diaries", which described his experiences working as an elf at Macy's department store during Christmas time in New York.

"SantaLand Diaries" was an immediate success with radio listeners, and made Sedaris what The New York Times called "a minor phenomenon". He began recording a monthly segment for NPR (based on entries in his diary, and edited and produced by Glass), considered adapting "SantaLand Diaries" into a screenplay for Touchstone Pictures, and signed a two-book deal with Little, Brown and Company. In 1993, he told The New York Times that he was publishing his first book, a collection of stories and essays, and had 70 pages written of his second book, a novel "about a man who keeps a diary and whom Mr. Sedaris described as 'not me, but a lot like me'".

In 1994, Sedaris released the book of stories and essays titled Barrel Fever. When, in 1995, Ira Glass began hosting the weekly hour-long PRI/Chicago Public Radio radio show This American Life, Sedaris became a frequent contributor. He also began publishing essays in Esquire and The New Yorker. In 1997, he published another collection of essays, Naked. His next book, Me Talk Pretty One Day, was written mostly in France over a period of seven months, and was published in 2000 to "practically unanimous rave reviews". For that book, Sedaris won the 2001 Thurber Prize for American Humor, and was named "Humorist of the Year" by Time magazine.

In April 2001, Variety reported that Sedaris had sold the Me Talk Pretty One Day film rights to director Wayne Wang, who was adapting four stories from the book for Columbia Pictures with hopes of beginning shooting in late 2001. Wang had completed the script and begun casting when Sedaris asked to "g[e]t out of it", after a conversation with his sister aroused concerns as to how his family might be portrayed on screen. (He wrote about the conversation and its aftermath in the essay "Repeat After Me".) Sedaris recounted that Wang was "a real prince....I didn't want him to be mad at me, but he was so grown up about it. I never saw how it could be turned into a movie anyway."

In 2004, Sedaris published Dress Your Family in Corduroy and Denim, which hit #1 on The New York Times Nonfiction Best Seller list on June 20, 2004. The audiobook of Dress Your Family, read by Sedaris, was nominated for a Grammy Award for Best Spoken Word Album; the same year, Sedaris was nominated for a Grammy Award for Best Comedy Album for his recording Live at Carnegie Hall. In March 2006, Ira Glass said that Sedaris' next book would be a collection of animal fables; that year, Sedaris included several animal fables in his US book tour, and three of his fables were broadcast on This American Life.

In the March 19, 2007 issue of The New Republic, Outside Magazine editor Alex Heard fact-checked Sedaris's books and alleged that some of what Sedaris described as true events actually never happened. Several published responses to Heard's article argued that Sedaris's readers are aware that his descriptions and stories are intentionally exaggerated and manipulated to maximize comic effect. For his part, Sedaris said he had not read the article, and, of the allegations, stated, "It just bothers the shit out of me."

In September 2007, a new Sedaris collection was announced for publication on June 3, 2008. The collection's working title was All the Beauty You Will Ever Need, but Sedaris later retitled it Indefinite Leave to Remain and finally settled on the title When You Are Engulfed in Flames. Although at least one news source assumed that the book would consist entirely of fables, Sedaris said in an October 2007 interview that the collection might include a "surprisingly brief story about [his] decision to quit smoking....along with stories about a Polish crybaby, throwing shit in a paraplegic's yard, chimpanzees at a typing school, and people visiting [him] in France."

In December 2008, David Sedaris traveled to Binghamton University to act as the fall commencement speaker; he then received an honorary doctorate from current university president Lois B. DeFleur.

In April 2010, BBC Radio 4 aired Meet David Sedaris, a four-part series of essays Sedaris read before an audience at BBC Radio Theatre in Broadcasting House.

Sedaris revealed in a book signing/reading at the Chicago auditorium that his next book would be out in October 2010 (April 17, 2010). At the time it was tentatively titled 'Beastiology', things animals do and was reportedly centered around fictional memoirs by animals. The collection of fables "detailing animals in strange adult situations" was released Sept. 28, 2010 under the title "A Modest Bestiary".

Sedaris is also a playwright, having written with his sister, actress Amy Sedaris, several plays under the name "The Talent Family". These include Stump the Host (1993), Stitches (1994), The Little Frieda Mysteries (1997), All were produced and presented by Meryl Vladimer when she was the artistic director of "the CLUB" at La MaMa, E.T.C. and The Book of Liz (2002) produced by Ania A. Shapiro. Sedaris also co-authored Incident at Cobbler's Knob, which was presented and produced by David Rockwell at the Lincoln Center Festival. Sets for those performances were designed by Sedaris's longtime partner, Hugh Hamrick, who also directed two of them, The Book of Liz and Incident at Cobbler's Knob.

Story and essay collections

• Barrel Fever (1994)
• Naked (1997)
• Holidays on Ice (1997)
• Me Talk Pretty One Day (2000)
• Dress Your Family in Corduroy and Denim (2004)
• Children Playing Before a Statue of Hercules (editor, 2005)
• When You Are Engulfed in Flames (2008)
• A Modest Bestiary (2010)

Audio recordings

• Barrel Fever and Other Stories (1994)
• Naked (1997)
• Me Talk Pretty One Day (2001)
• The David Sedaris Box Set (2002)
• Live At Carnegie Hall (2003)
• Dress Your Family in Corduroy and Denim (2004)
• Holidays On Ice (2008)
• When You Are Engulfed in Flames (2008)
• Live For Your Listening Pleasure (2009)

Episodes of This American Life featuring Sedaris

• 3 - Poultry Slam
• 4 - Vacations
• 6 - Christmas
• 23 - Drama Bug
• 27 - The Cruelty of Children
• 28 - Detectives
• 35 - Fall Clearance Sale
• 47 - Christmas and Commerce
• 49 - Animals
• 52 - Edge of Sanity
• 57 - Delivery
• 60 - Business of Death
• 67 - Your Dream, My Nightmare
• 73 - Blame It on Art
• 82 - Haunted
• 87 - Very Special David Sedaris Christmas
• 97 - Death to Wacky
• 99 - I Enjoy being a Girl, Sort Of
• 104 - Music Lessons
• 136 - You Are Here
• 137 - The Book That Changed Your Life
• 141 - Invisible Worlds
• 148 - The Angels Want to Wear my Red Suit
• 154 - In Dog we Trust

• 161 - Million Bubbles
• 165 - Americans in Paris
• 173 - Three Kinds of Deception
• 193 - Stories of Loss
• 194 - Before and After
• 198 - How to Win Friends and Influence People
• 201 - Them
• 214 - Family Physics
• 221 - Fake ID
• 225 - Home Movies
• 235 - The Balloon Goes Up
• 240 - I'm in Charge Now
• 241 - 20 Acts in 60 Minutes
• 257 - What I Should've Said
• 259 - Promised Land
• 277 - Apology
• 288 - Not What I Meant
• 303 - David and Goliath
• 305 - Holiday Spectacular
• 308 - Star-Crossed Love
• 309 - Cat and Mouse
• 315 - Parrot and the Potbellied Pig
• 319 - And the Call Was Coming from the Basement
• 415 - Crybabies