Kushner was born in Manhattan, New York to Jewish clarinetist and conductor William Kushner and Sylvia Deutscher, a bassoonist. Shortly after his birth, the family moved to Lake Charles, Louisiana, the seat of Calcasieu Parish where he spent his childhood. During high school Kushner had a reputation in policy debate, at one point going to a camp, and making it to the final rounds. Kushner moved to New York in 1974 to begin his undergraduate college education at Columbia University, where he received a Bachelor of Arts degree in Medieval Studies in 1978. He studied directing at New York University's Graduate School until 1984. During graduate school, he spent the summers of 1978-1981 directing both early original works (Masque of Owls and Incidents and Occurrences During the Travels of the Tailor Max) and plays by Shakespeare (A Midsummer Night's Dream and The Tempest) for the children attending the Governor's Program for Gifted Children (GPGC) in Lake Charles. In 2008, he received a Honorary Degree of Doctor of Letters from SUNY Purchase College.

Kushner's best known work is Angels in America (a play in two parts: Millennium Approaches and Perestroika), a seven-hour epic about the AIDS epidemic in Reagan-era New York, which was later adapted into a miniseries for which Kushner wrote the screenplay. His other plays include Hydriotaphia, Slavs!: Thinking About the Longstanding Problems of Virtue and Happiness, A Bright Room Called Day, Homebody/Kabul, and the book for the musical Caroline, or Change. His new translation of Bertolt Brecht's Mother Courage and Her Children was performed at the Delacorte Theater in the summer of 2006 starring Meryl Streep and directed by George C. Wolfe. Kushner has also adapted Brecht's The Good Person of Szechwan, Corneille's The Illusion, S. Ansky's play The Dybbuk.

Kushner has moved into cinema of late. His co-written screenplay Munich was produced and directed by Steven Spielberg in 2005. In January 2006, a documentary feature about Kushner entitled Wrestling With Angels debuted at the Sundance Film Festival. The film was directed by Freida Lee Mock. He is currently working with Spielberg again, writing the screenplay for a new movie about the complex icon Abraham Lincoln.

Kushner is famous for frequent revisions and years-long gestations of his plays. Both Angels in America: Perestroika and Homebody/Kabul were significantly revised even after they were first published. His newest completed work, the play The Intelligent Homosexual's Guide to Capitalism and Socialism with a Key to the Scriptures, began as a novel more than a decade ago.

Kushner's plays and screenplays are often a departure from typical Realism, experimenting with conventional storytelling by using shorter episodes.For example, the Angels in America plays together contain almost 50 scenes. His condensed, heightened dialogue compacts the action into impacting, concise bursts. He still proves effective in a more traditional, "long form" structure; three of the acts in Perestroika are long, single scenes. He is not afraid of spectacle - extraordinary moments that stay on target, not simply for show. Again in Angels, we witness a midnight appearance from an angel, and a frightening daytime appearance of a Biblical harbinger of revelation. The play A Bright Room Called Day, and The Illusion, his 1990 adaptation of Pierre Corneille's L'illusion Comique, are primarily in verse, showing an almost Shakespearean love of poetry. Still, his subjects remain current, and, like Henrik Ibsen, he creates stories that give rise to social discussion, instead of being simply "issue plays."

Kushner's criticism of Israel's treatment of the Palestinians and of the increased religious extremism in Israeli politics and culture has created some controversy in the American Jewish community, including some opposition to his receiving an honorary doctorate at the 2006 commencement of Brandeis University. The Zionist Organization of America unsuccessfully lobbied the university to rescind its invitation to Kushner. During the controversy, quotes critical of Zionism and Israel made by Kushner were circulated. Kushner said at the time that his quotes were "grossly mischaracterized." Kushner told the Jewish Advocate in an interview, "All that anybody seems to be reading is a couple of right-wing Web sites taking things deliberately out of context and excluding anything that would complicate the picture by making me seem like a reasonable person, which I basically think I am."

In an interview with the Jewish Independent, Kushner insisted, "I want the state of Israel to continue to exist. I've always said that. I've never said anything else. My positions have been lied about and misrepresented in so many ways. People claim that I'm for a one-state solution, which is not true." However, he later stated that he hopes that "there might be a merging of the two countries because [they're] geographically kind of ridiculous looking on a map," although he acknowledged that political realities make this unlikely in the near future.