Auletta grew up in Brooklyn, the son of an Italian-American father and a Jewish-American mother. He attended Abraham Lincoln High School there.

Auletta is a graduate of State University of New York at Oswego (SUNY Oswego) where he was a member of Sigma Tau Chi fraternity.

Auletta worked in government and on several political campaigns, and taught and trained Peace Corps volunteers. He was also the first executive director of the New York City Off-Track Betting Corporation. In 1974, Auletta became the chief political correspondent for the New York Post. Following that, he was a staff writer and weekly columnist for the Village Voice, and then a contributing editor at New York magazine. He started contributing to The New Yorker in 1977. Between 1977 and 1993, he wrote a weekly political column for the New York Daily News. He was the guest editor of the 2002 edition of The Best Business Stories of the Year.

Auletta has written the "Annals of Communications" column for The New Yorker since 1992. He is the author of ten books, including Three Blind Mice: How the TV Networks Lost Their Way (1991), Greed and Glory on Wall Street: The Fall of The House of Lehman (1986), The Highwaymen: Warriors of the Information Superhighway (1997), and World War 3.0: Microsoft and Its Enemies (2001). His book Backstory: Inside the Business of News (2003) is a collection of his columns from The New Yorker. His book, Media Man: Ted Turner’s Improbable Empire, was published in the fall of 2004. His most recent book, "Googled: The End of the World As We Know It," was published in November 2009 and will be released in paperback in October 2010.

Auletta was among the first to popularize the idea of the so-called "information superhighway" with his February 22, 1993, New Yorker profile of Barry Diller, in which he described how Diller used his Apple PowerBook to anticipate the digital future. He has profiled the leading figures and companies of the Information Age, including Bill Gates, Rupert Murdoch, AOL Time Warner, John Malone, and the New York Times. His 2001 profile of Ted Turner won a National Magazine Award.

Auletta has been named a Literary Lion by the New York Public Library. He has won numerous journalism awards, and was selected as one of the twentieth century’s top one hundred business journalists. He has served as a Pulitzer Prize juror, and for nearly two decades has been a judge of the annual Livingston Award for Young Journalists, one of the National Journalism Awards. He has twice served as a board member of International PEN, and is a trustee of The Public Theatre/New York Shakespeare Festival.

Auletta lives in Manhattan, New York, with his wife, the literary agent Amanda Urban.