Dybek was born in Chicago, Illinois and raised in Chicago's Little Village and Pilsen neighborhoods in the 1950s and early 1960s. Dybek graduated from St. Rita of Cascia High School in 1959. He writes about these neighborhoods and the ethnic shift that occurred when they went from being populated with Poles and Czechs toward the primarily Hispanic areas of the city that still remain to this day. Dybek's father immigrated to the U.S. from Poland and took the job as a foreman at International Harvester; his mother worked as a truck dispatcher.

Dybek earned an MFA from the Iowa Writers' Workshop at the University of Iowa and has an MA in literature from Loyola University Chicago. He currently teaches at Northwestern University after more than 30 years teaching at Western Michigan University, where he remains an Adjunct Professor of English and a member of the permanent faculty of the renowned Prague Summer Program. He is also a contributing editor at The Alaska Quarterly Review.

Dybek has two brothers, Tom a therapist and actor living in New York City and David, who is the inspiration for some of his stories. He and his wife Caren Dybek, a retired English school teacher, live in Kalamazoo.

His two collections of poems are Brass Knuckles (University of Pittsburgh Press, 1979) and Streets in Their Own Ink (Farrar, 2004). His fiction includes Childhood and Other Neighborhoods, The Coast of Chicago, and most recently I Sailed With Magellan, a novel-in-stories. His work is frequently anthologized and appears regularly in magazines such as Harper's, The New Yorker, Atlantic Monthly, Poetry, Tin House, Ploughshares, and Triquarterly.

In 2004, his collection, The Coast of Chicago, was the “One Book, One Chicago” selection...“One Book” is an ambitious program in which the selected book is read in libraries and high schools throughout the city. Also in 2004, I Sailed With Magellan was awarded the prize in adult fiction from the Society of Midland Authors. The book was selected as a New York Times Notable Book and was chosen by the American Library Association as one of the 26 Most Notable Books of 2005. One of the stories, “Breasts,” appears in the 2004 Best American Short Stories.

Dybek's work has won numerous awards, among them a Lannan Prize, a PEN/Malamud Award, a Whiting Writers' Award, a Guggenheim, and numerous O. Henry Prizes. His work has been included in The Best American Short Stories and The Best American Poetry. On September 25, 2007, Dybek was awarded a MacArthur Fellowship. One day later, he was awarded the 2007 Rea Award for the Short Story, a $30,000 annual prize given for "originality and influence on the genre."