He was educated at Phillips Academy (1970), Harvard College (1973), and Yale Law School (1978). His previous positions included a senior fellowship at the International Institute for Strategic Studies (1985—1987), senior analyst at RAND Corporation (1989—1993), Director of Policy Planning (1994—1996), and Deputy National Security Advisor (1997—2001). He also served on the Project on National Security Reform's Guiding Coalition. He was also a senior fellow at the Brookings Institution.

According to the Wall Street Journal, Steinberg, along with Daniel Kurtzer and Dennis Ross, were among the principal authors of Barack Obama’s address on the Middle East to AIPAC in June 2008, which was viewed as the Democratic nominee’s most expansive on international affairs.

He was mentioned as being "at the top" of Obama's list of candidates for the post of National Security Advisor, but Andrea Mitchell reported on November 24, 2008 that Obama would appoint Steinberg Deputy Secretary of State. On December 23, 2008, Steinberg himself confirmed the appointment in a letter addressed to students and faculty at the Johnson school.

As Deputy Secretary of State, Steinberg notably coined the phrase "strategic reassurance" to describe U.S.-China relations suggestive of the idea that the United States should reassure China about welcoming China's rise while China would reassure the US and its neighbors that it would not conflict with their interests.