Though his father was a banker, Crossan was steeped in the rural Irish life experienced in frequent visits to the home of his paternal grandparents. On graduation from St. Eunan's College, a boarding high school in 1950, Crossan joined the Servites, a Catholic religious order, and moved to the United States. He was trained at Stonebridge Seminary, Lake Bluff, Illinois, then ordained a priest in 1957. Crossan returned to Ireland, where he earned his Doctor of Divinity in 1959 at Maynooth College, the Irish national seminary. There followed two more years of study in biblical languages at the Pontifical Biblical Institute in Rome. Thus equipped, he returned to the seminary where he had trained, and through four years of teaching he "first began to learn something about the Bible" as he puts it. In 1965 Crossan embarked on two additional years of study, this time in archaeology based at the Ecole Biblique in Jordanian East Jerusalem. His work led him to journey through many Middle-Eastern countries before escaping just days prior to the outbreak of the Six Day War of 1967.

After a year at St. Mary of the Lake Seminary in Mundelein, Illinois, and a year at Catholic Theological Union in Chicago, Crossan chose to resign his priesthood. He cited as reasons both a desire for more academic freedom, and the freedom to be bound in matrimony. He married Margaret Dagenais, a professor at Loyola University (Chicago) in the summer of 1969, and joined the faculty of DePaul University that fall, where he taught undergraduates Comparative Religion for twenty-five years until retiring in 1995. His first wife died of a heart attack in 1983. Crossan married Sarah Sexton, a social worker with two grown children, in 1986. Since his academic retirement, Crossan has lived in the Orlando, Florida, area, remaining active in research, writing, and teaching seminars.

Crossan writes books for both academic and popular audiences. His two lengthiest books are The Historical Jesus: The Life of a Mediterranean Jewish Peasant (1991) and The Birth of Christianity: Discovering What Happened Immediately after the Execution of Jesus (1998).

Two of Crossan's briefer popular books are Jesus: A Revolutionary Biography (1994) and Who Killed Jesus? Exposing the Roots of Anti-Semitism in the Gospel Story of the Death of Jesus (1995).

Crossan has also co-authored a book about Jesus and another about Paul with archaeologist Jonathan L. Reed (2001, 2004), which provide contextualization of the lives and times of these two men.

In 1985, Crossan and Robert Funk founded the Jesus Seminar, a group of academics studying a historical Jesus. Crossan served as co-chair of the Jesus Seminar for its first decade. He is also a member of the Society of Biblical Literature (SBL). He is also featured in a number of Living the Questions programs, including "Eclipsing Empire" and "First Light."

Crossan suggests Jesus was an illiterate "Jewish Cynic" from a landless peasant background, initially a follower of John the Baptist. Jesus was a healer and man of great wisdom and courage who taught a message of inclusiveness, tolerance, and liberation. "His strategy . . . was the combination of free healing and common eating . . . that negated the hierarchical and patronal normalcies of Jewish religion and Roman power . . . He was neither broker nor mediator but . . . the announcer that neither should exist between humanity and divinity or humanity and itself."

Out of his study of cross-attestation and strata of the ancient texts, Crossan asserts that many of the gospel stories of Jesus are not factual, including his "nature miracles", the virgin birth, and the raising of Lazarus. While pointing out the meager attestation and apparent belatedness of the miracles' appearance in the trajectory of the canon, Crossan takes the opposite view, that Jesus was known during earliest Christianity as a powerful magician, which was "a very problematic and controversial phenomenon not only for his enemies but even for his friends," who began washing miracles out of the tradition early on.

Crossan maintains the Gospels were never intended to be taken literally by their authors. He argues that the meaning of the story is the real issue, not whether a particular story about Jesus is history or parable. He proposes that it is historically probable that, like all but one known victim of crucifixion, Jesus' body was scavenged by animals rather than being placed in a tomb. Crossan believes in "resurrection" by faith but holds that bodily resuscitation was never contemplated by early Christians. He believes that the rapture is based on a misreading of I Thessalonians.

Central to Crossan's methodology is the dating of texts. This is laid out more or less fully in The Historical Jesus in one of the appendices. He dates part of the Coptic Gospel of Thomas to the 50s CE, as well as the first layer of the hypothetical Q Document (in this he is heavily dependent on the work of John Kloppenborg). He also assigns a portion of the Gospel of Peter, which he calls the "Cross Gospel," to a date preceding the synoptic gospels, the reasoning of which is laid out more fully in The Cross that Spoke: The Origin of the Passion Narratives. He believes the "Cross Gospel" was the forerunner to the passion narratives in the canonical gospels. He does not date the synoptics until the mid to late 70s CE, starting with the Gospel of Mark and ending with Luke in the 90s. As for the Gospel of John, he believes part was constructed at the beginning of the 2nd century CE and another part closer to the middle of the century. Following Rudolf Bultmann, he believes there is an earlier "Signs Source" for John as well. His dating methods and conclusions are quite controversial, particularly regarding the dating of Thomas and the "Cross Gospel." The very early dating of these non-canonical sources has not been accepted by all biblical scholars.

In God and Empire: Jesus Against Rome, Then and Now (2007), Crossan starts with the presumption of reader familiarity with key points from his earlier work on the nonviolent revolutionary Jesus, his Kingdom movement, and the surrounding matrix of the Roman imperial theological system of religion, war, victory, peace, but discusses them in the broader context of the escalating violence in world politics and popular culture of today. Within that matrix, he points out, early in the book, that "(t)here was a human being in the first century who was called 'Divine,' 'Son of God,' 'God,' and 'God from God,' whose titles were 'Lord,' 'Redeemer,' 'Liberator,' and 'Saviour of the World.'" "(M)ost Christians probably think that those titles were originally created and uniquely applied to Christ. But before Jesus ever existed, all those terms belonged to Caesar Augustus." Crossan cites the adoption of them by the early Christians to apply to Jesus as denying them of Caesar the Augustus. "They were taking the identity of the Roman emperor and giving it to a Jewish peasant. Either that was a peculiar joke and a very low lampoon, or it was what the Romans called majestas and we call high treason." He ends the book asking the question "Is Bible-fed Christian violence supporting or even instigating our imperial violence as the New Roman Empire?"