Russo was born in Johnstown, New York, and raised in nearby Gloversville. He earned a Bachelor's degree, a Master of Fine Arts degree, and a Doctor of Philosophy degree from the University of Arizona, which he attended from 1967 through 1979. He was teaching in the English department at Southern Illinois University Carbondale when his first novel, Mohawk, was published in 1986. Much of his work has been semi-autobiographical, drawing on his life from his upbringing in upstate New York to his time teaching literature at Colby College. Russo is retired from the faculty of Colby College. He now lives and writes in Camden, Maine.

His 2001 novel Empire Falls received the 2002 Pulitzer Prize for Fiction. He has written six other novels and a short story collection. Russo co-wrote the 1998 film Twilight with director Robert Benton, who also adapted and directed Russo's Nobody's Fool into a 1994 film of the same title, starring Paul Newman. Russo wrote the teleplay for the HBO adaptation of Empire Falls, the screenplay for the 2005 film Ice Harvest, and the screenplay for the 2005 Niall Johnson film Keeping Mum, which starred Rowan Atkinson.