Son of Gowan Duff (father) - a scientist - and Kuia Hinau (mother) (of Ngati Rangitihi and Tuwharetoa descent), and grandson of writer Oliver Duff, he was born and raised in a State housing area in Rotorua, New Zealand.

His parents separated when he was 10, and Duff moved in with a M?ori uncle and aunt at Whakarewarewa. He was expelled from his school Rotorua Boys' High School and ran away from home, ending up as a State ward at Hamilton Boys’ Home. Later he lived with another uncle, anthropologist Roger Duff, and went back to school at Christchurch Boys' High School.

At 15 he was sentenced to a term in Waikeria Borstal for assault and breaking and entering. Later he worked as an installer of sheet metal insulation and sang in a band. After numerous convictions for petty offences, Duff went to London. He has said this is where he "messed up but grew up".

In September 2007 he was arrested while speeding near Taupo. On March 30, 2008 he appeared in the Taupo District Court at a defended hearing after pleading not guilty to failing to remain at a scene after being stopped, failing to stop for police and two charges of resisting police. He was also allegedly abusive and very uncooperative.During the alleged incident, he was stopped and then took off, after a pursuit he allegedly swung a policewoman around by the handcuffs as she was attempting to restrain him.The charges were later dismissed by the Taupo District Court, Judge McGuire saying: "the result however, is that I am left uneasy over whether police prosecutorial power was used wisely and fairly in this instance...". However a high court judge subsequently ruled that the judge erred and police could detain a driver while carrying out checks, although he did not require that the charges be relaid.

Duff ran various businesses of his own back in New Zealand and began to write full-time in 1985.

He tried writing a thriller as his first novel, but it was rejected. He burned the manuscript and started writing Once Were Warriors, which had an immediate and great impact. The novel is written in juxtaposed interior monologues, making its style stand out from other works. It was winner of the PEN Best First Book Award, was runner-up in the Goodman Fielder Wattie Award, and was made into the award-winning film of the same name in 1994.

Another of his novels, One Night Out Stealing, appeared in 1991 and was shortlisted in the 1992 Goodman Fielder Wattie Book Awards.

He was also awarded the Frank Sargeson Fellowship in 1991, and began writing a weekly -- later bi-weekly — column for the Evening Post , syndicated to eight other newspapers. In this, and in his 1993 analysis, M?ori: The Crisis and the Challenge, he has developed his ideas on the failures of M?oridom, castigating both the traditional leadership and the radical movement for dwelling on the injustices of the past and expecting others to resolve them, instead of encouraging M?ori to get on and help themselves. The blame for M?ori underperformance he puts squarely back on M?ori, for not making the most of the opportunities given them. This somewhat simplistic message has proved highly controversial.

State Ward started as a series of episodes on radio in 1993 and was published as a novella in 1994.

The Books in Homes scheme, co-founded in 1995 by Duff and Christine Fernyhough, with commercial sponsorship and government support, aims to alleviate poverty and illiteracy by providing low-cost books to underprivileged children, thus encouraging them to read. In its first year alone it put about 180,000 new books in the hands of about 38,000 children. By 2008, the scheme delivered 5 million books to schools around New Zealand.

What Becomes of the Broken Hearted? (1996), the sequel to Once Were Warriors, was the winner of the fiction section of the 1997 Montana Book Awards and was also made into a film in 1999. Two Sides of the Moon was published in 1998. Duff wrote his own memoir, Out of the Mist and the Steam, in 1999. His first novel to be set outside of New Zealand is Szabad (2001). Inspired by the stories of people Duff met during his several trips to Hungary, the story takes place in Budapest during the 1956 Hungarian Revolution. Jake's Long Shadow (2002) is the third volume in Duff's Once Were Warriors trilogy. In 2003 Once Were Warriors was brought to the stage across New Zealand as a musical drama.

In 2000, Duff released a book called Alan Duff's Maori Heroes.

In 2009, Duff released his new book Who Sings for Lu?