A self-described "middle class Jewish kid, Price was born in the Bronx, New York City and grew up in a housing project in the northeast Bronx. He graduated from the Bronx High School of Science in 1967 and obtained a B.A. from Cornell University and an MFA from Columbia University. He also did graduate work at Stanford University.

He has taught writing at Columbia, Yale University, and New York University. He was one of the first people interviewed on the NPR show Fresh Air when it began airing nationally in 1987. In 1999, he received the American Academy of Arts and Letters Award in Literature.

He is divorced from his wife and is now living with the writer Lorraine Adams in Harlem.

Price's novels explore late 20th century urban America in a gritty, realistic manner that has brought him considerable literary acclaim. Several of his novels are set in a fictional northern New Jersey city called Dempsy. In his review of Lush Life (2008), Walter Kirn compared Price to Raymond Chandler and Saul Bellow.

Price's first novel was The Wanderers (1974), a coming-of-age story set in the Bronx in 1962, written when Price was 24 years old. It was adapted into a movie in 1979, with a screenplay by Rose and Philip Kaufman and directed by the latter.

Clockers (1992) was nominated for the National Book Critics Circle Award. It has been praised for its humor, suspense, dialogue, and character development. In 1995, it was made into a movie directed by Spike Lee; Price and Lee shared writing credits for the screenplay.

Price has written numerous screenplays, including The Color of Money (1986), for which he was nominated for an Oscar, Life Lessons (the Martin Scorsese segment of New York Stories) (1989), Sea of Love (1989), Mad Dog and Glory (1992), Ransom (1996), and Shaft (2000). He also wrote for the HBO series The Wire. Price was nominated for the Writers Guild of America Award award for Best Dramatic Series at the February 2008 ceremony for his work on the fifth season of The Wire.He is often cast in cameo roles in the films he writes.

Price did uncredited work on the film American Gangster.

Price also wrote and conceptualized the 15-minute film surrounding Michael Jackson's "Bad" video.

Additionally, he has published articles in the The New York Times, Esquire Magazine, The New Yorker, Village Voice, Rolling Stone and others.

In July 2010, a group art show inspired by Lush Life was held in nine galleries in New York City.

As of August 2010, he has agreed to write a series of detective novels for Henry Holt under a pen name - Jay Morris - starting in fall 2011

Novels by Price

• 1974. The Wanderers
• 1976. Bloodbrothers
• 1978. Ladies' Man
• 1983. The Breaks
• 1992. Clockers
• 1998. Freedomland
• 2003. Samaritan
• 2008. Lush Life