Born in Louisville, Kentucky (or possibly Dayton, Washington) to Jim and Mary Besy (Burkhardt) Dorris, Dorris claimed Modoc Indian, Irish, and French ancestry. However, there is no documentary proof of Native American ancestry for him, nor was he an enrolled member in any federally recognized tribe. In an article published in New York magazine two months after Dorris's death, a reporter quoted the Modoc tribal historian as saying, "Dorris was probably the descendant of a white man named Dorris whom records show befriended the Modocs on the West Coast just before and after the Modoc War of 1873. Even so, there is no record of a Dorris having been enrolled as an Indian citizen on the Klamath rolls."

He received his BA from Georgetown University in 1967 and a M.Phil. from Yale University in 1970. In 1972, Dorris joined Dartmouth College's Native American Studies department.

In 1971, he became the first unmarried man in the United States to adopt a child. His adopted son, a three-year-old Lakota boy named Reynold Abel, was eventually diagnosed with fetal alcohol syndrome. Dorris' struggle to understand and care for his son became the subject of his famous work The Broken Cord (in which he uses the pseudonym "Adam" for his son). Dorris went on to adopt two more Native American children, Jeffrey Sava in 1974 and Madeline Hannah in 1976, both of whom likely suffered from fetal alcohol syndrome.

In 1981, he married Louise Erdrich, a writer of German-American and Anishinaabe descent, whom he met while teaching at Dartmouth. She adopted his three children and eventually gave birth to three daughters by him: Persia Andromeda, Pallas Antigone, and Aza Marion. They moved to Minnesota. Erdrich and Dorris contributed to each other's writing and wrote together under the pseudonym Milou North.

In 1991, Reynold Abel was hit by a car and killed. In 1995, Dorris and Erdrich unsuccessfully pursued a court case against their son Jeffrey Sava, who had accused them both of child abuse. Shortly afterward, Dorris and Erdrich separated and began divorce proceedings. On April 10, 1997, Dorris used a combination of suffocation, drugs, and alcohol to commit suicide in the Brick Tower Motor Inn in Concord, New Hampshire. Shortly before his death, allegations had surfaced of possible abuse against one of his daughters. In conversations with friends, Dorris maintained his innocence and his lack of faith that the legal system would exonerate him. With his death, the criminal investigations into the sexual abuse allegations were closed, leaving them permanently unresolved.

On the basis of statements in The Broken Cord, Erdrich and Dorris were believed to have called for jailing alcoholic Native mothers during their pregnancies to forestall fetal alcohol syndrome. Partly for this reason, Dorris came under severe criticism by two professional colleagues, Elizabeth Cook-Lynn and Gerald Vizenor, Native Americans who were writers, Native American rights activists, and longtime professors. In 1990, Cook-Lynn informed Dorris by letter that she would not accept contributions from him to her journal Wí?azo ?a Review, decrying that the public mistook him for a spokesperson for the Lakota tribe, decrying that his views would harm Native American communities, and questioning his academic integrity, accusing of claiming false credentials and expertise in anthropology. She accused Dorris of pandering to an academic community that wanted Natives to behave in a certain way. Years later, after Dorris's death, Gerald Vizenor in his book, Manifest Manners: Postindian Warriors of Survivance (1999) accused Dorris of pandering to white views of Native alcoholism.