Kunstler was born in New York City to Jewish parents, who divorced when he was eight. His father was a middleman in the diamond trade. Kunstler spent most of his childhood with his mother and stepfather, a publicist for Broadway shows. While spending summers at a boys' camp in New Hampshire, he became acquainted with the small town ethos that would later permeate many of his works. In 1966 he graduated from New York City's High School of Music & Art, and then attended the State University of New York at Brockport where he majored in Theater.

After college Kunstler worked as a reporter and feature writer for a number of newspapers, and finally as a staff writer for Rolling Stone. In 1975, he began writing books and lecturing full-time. He lives in Saratoga Springs, New York and was formerly married to the children's author Jennifer Armstrong.

Over the course of the first 14 years of his writing career (1979-1993) Kunstler wrote seven novels, and no non-fiction books at all.

Since the mid-1990s, he has written four non-fiction books about suburban development and diminishing global oil supplies. According to the Columbia Journalism Review, his first work on the subject, The Geography of Nowhere, discussed the effects of "cartoon architecture, junked cities, and a ravaged countryside", as he put it. Described as a Jeremiad by The Washington Post, Kunstler is critic of suburbia and urban development trends throughout the United States, and is a proponent of the New Urbanism movement. According to Scott Carlson, reporter for The Chronicle of Higher Education, Kunstler's books on the subject have become "standard reading in architecture and urban planning courses".

He describes America as a poorly planned and "tragic landscape of highway strips, parking lots, housing tracts, mega-malls, junked cities, and ravaged countryside that makes up the everyday environment where most Americans live and work." In a 2001 op-ed for Planetizen, he wrote that in the wake of 9/11 the "age of skyscrapers is at an end", that no new megatowers would be built, and that existing tall buildings are destined to be dismantled.

In his books that followed, such as Home From Nowhere, The City in Mind, and The Long Emergency (2005), he pushed hard on taboo topics like a post-oil America. He was featured in the "peak oil" documentary, The End of Suburbia, widely circulated on the internet, as well as the Canadian documentary Radiant City (2006).

In his recent science fiction novel World Made by Hand (2008), he describes a future dependent on localized production and agriculture, with little reliance on imports. The Witch of Hebron, a sequel, was released in the autumn of 2010.

In his writings and lectures, he makes a strong case that there is no other alternative energy source on the horizon that can replace relatively cheap oil. He therefore envisions a "low energy" world that will be radically different from today's. This has contributed to his becoming an outspoken advocate for one of his solutions, a more energy-efficient rail system, and writes "we have to get cracking on the revival of the railroad system if we expect to remain a united country."

Charles Bensinger, co-founder of Renewable Energy Partners of New Mexico, describes Kunstler's views as "fashionably fear-mongering" and uninformed regarding the potential of renewable energy, biofuels, energy efficiency and smart-growth policies to eliminate the need for fossil fuels. Contrarily, Paul Salopek of The Chicago Tribune finds that, "Kunstler has plotted energy starvation to its logical extremes" and points to the US Department of Energy Hirsch report as drawing similar conclusions while David Ehrenfeld writing for American Scientist sees Kunstler delivering a "powerful integration of science, technology, economics, finance, international politics and social change" with a "lengthy discussion of the alternatives to cheap oil."

In May 2008 oil reached $132 a barrel, lending credence to Kunstler's warnings about high energy prices. Kunstler commented on the price surge, stating "I'm not cheerleading for doom, you understand... merely asserting that we have a problem in the USA. Our behavior and our lifestyle are not consistent with reality. The markets are registering this for the moment."

Kunstler, who has no formal training in the fields in which he prognosticates, made similar dire predictions for Y2K as he makes for peak oil. Kunstler responds to this criticism by saying that a Y2K-related catastrophe was averted precisely because of the billions of dollars that were spent fixing the problem. As with acid rain and ozone depletion in the '90s, a resoundingly successful, well-coordinated international response had the ironic side effect of discrediting the very worst-case scenarios that inspired the efforts in the first place.

Kunstler has made several failed predictions regarding U.S. stock markets. In June 2005 and again in early 2006, Kunstler predicted that the Dow would crash to 4,000 by the end of the year. The Dow in fact reached a new peak of approximately 12,500 by the end of 2006. In his predictions for 2007, Kunstler admitted his mistake, ascribing the Dow's climb to "inertia combined with sheer luck". In January 2009, Kunstler again repeated with Dow 4000 prediction. The Dow, in fact, ended 2009 at more than twice that value.

The Albany Times Union reviewed World Made by Hand, opening with, "James Howard Kunstler is fiddling his way to the apocalypse, one jig at a time." The reviewer calls it "a grim scenario" with "an upside" or two.

In a critique of James Howard Kunstler's weekly audio podcast, the Columbia Journalism Review called the KunstlerCast "a weekly podcast that offers some of the smartest, most honest urban commentary around...online or off."

Kunstler has faced strong criticism for his pro-Israeli stance in the debate over the Israeli—Palestinian conflict.

Energy

"...we are in danger not just of oil prices going way back up again, but of losing access to our supplies from the exporting countries. In other words, we're just as likely to face shortages as high prices, and soon. Oil shortages are certain to produce a political freak-out here unless we get our heads screwed on right..."

"the truth is that no combination of solar, wind, nuclear power, ethanol, biodiesel, tar sands and used French-fry oil will allow us to power ... the interstate highway system — or even a fraction of these things — in the future...our quandary: the American public's narrow focus on keeping all our cars running at any cost."

"... we'll have to figure out how to make things in this country again. We will not be manufacturing things at the scale, or in the manner, we were used to in, say, 1962. We'll have to do it far more modestly, using much more meager amounts of energy than we did in the past."

"The idea that we can become "energy independent" and maintain our current lifestyle is absurd."

Society

"...the American public is deathly afraid of the kind of changes we actually face — such as, the end of consumer culture, the gross loss of value in suburban real estate (which forms the bulk of the middle class's private wealth), the prospect of food and fuel scarcities, the need to re-localize our lives, the need to physically shape up to stop the costly and unnecessary drain on our medical resources, to grow more of our own food, to work harder at things that actually matter, and to save whatever we can for a difficult future."

"... we're not going back to a "consumer" economy. We're heading into a hard work economy in which people derive their pleasures and gratification more traditionally — mainly through the company of their fellow human beings..."

"Please stop referring to yourselves as consumers. "Consumers" are different than citizens. Consumers do not have obligations, responsibilities, and duties to their fellow human beings. And as long as you are using that word “consumer,” you will be degrading the quality of the public discussion as we go into the very difficult future that we face."

Food

"... we'll have to dramatically reorganize the everyday activities of American life. We'll have to grow our food closer to home, in a manner that will require more human attention. In fact, agriculture needs to return to the center of economic life."

Commerce

"... we're going to have to make things again, and raise things out of the earth, locally, and trade these things for money of some kind that we earn through our own productive activities."

"We'll have to restore local economic networks — the very networks that the big-box stores systematically destroyed — made of fine-grained layers of wholesalers, middlemen and retailers."

Transportation

"...we have to move away from the private automobile and commercial trucking, and the airline industry is certain to contract dramatically. When are we going to start the discussion about rebuilding a US public transit system that was once the envy of the world? It no longer matters how much Americans love their cars, or even how much investment we've made in car infrastructure."

"Fixing the U.S. passenger railroad system is probably the one project we could undertake right away that would have the greatest impact on the country's oil consumption."

"California (and every other region of America) would benefit much more from normal-speed trains running every hour on the hour on tracks that already exist than from a mega-expensive, grandiose sci-fi program that might not get built for ten years. The dregs of the Big Three automakers can and should be reorganized to produce the rolling stock for a revived railroad system."

"The motoring era is coming to an end. Heroic investments in highway infrastructure to create jobs will be a tragic waste of our dwindling capital."

"[Economic] Stimulus aimed at perpetuating mass motoring will be a tragic waste of our dwindling resources. We'd be better off aiming it at fixing the railroads (especially electrifying them), refitting our harbors with piers and warehouses in preparation to move more stuff by boats, and in repairing the electric grid."

"The airline industry is disintegrating under the enormous pressure of fuel costs. Airlines cannot fire any more employees and have already offloaded their pension obligations and outsourced their repairs. At least five small airlines have filed for bankruptcy protection in the past two months. If we don't get the passenger trains running again, Americans will be going nowhere five years from now."

"One other implication of this is the necessity to use our waterways for moving things and people again. Has anybody noticed, for instance, that the once-bustling New York Harbor, possibly the biggest and best sheltered deepwater harbor in the world, has next-to-zero operating docks left along its massive perimeter?" (In 2008, New York Harbor was the third busiest in the US out of 149, as measured by tons of cargo handled, with over 150,000,000. )