Frank was born into a comfortably-off Jewish family In Long Branch, New Jersey. He was a precocious intellect, and was expelled from high school for refusing to take a Shakespeare course saying that he knew more than the teacher. He completed boarding school in Lausanne, Switzerland and returned to the United States to take a B.A. and an M.A. from Yale University in 1911.

Frank's first published novel, The Unwelcome Man (1917), was a psychoanalytic look into a man contemplating suicide. The novel drew upon the ideas of New England transcendentalists such as Ralph Waldo Emerson and Walt Whitman.

In 1916, he was made associate editor of The Seven Arts, a journal which ran for just twelve issues but became an important artistic and political journal. With the determined pacifism of its contributors (which also included Randolph Bourne, Van Wyck Brooks, and James Oppenheim, the founder and general editor of the magazine) came a cessation of funds which led to its demise. Frank also became a regular contributor to the New Yorker in 1925 under the pseudonym, "Search-light." That same year he was named contributing editor of The New Republic. His cultural study of Spain, Virgin Spain (1926), was mocked and ridiculed by Ernest Hemingway in Death in the Afternoon (1932).

Frank was married in January 1917 to Margaret Naumburg, a prominent postgraduate pupil of John Dewey who developed techniques which later became known as art therapy.

Frank studied mysticism and oriental religions. In the twenties he also came in contact with G. I. Gurdjieff through reading P. D. Ouspensky, which was introduced to him by Hart Crane and Gorham Munson. Frank, Munson and Crane were all preoccupied with a mystical interpretation of American history in which America appears as a visionary place where the spiritual regeneration impossible in the old world is a real possibility, and they wondered wheter Gurdjieff might not be the agent of this spiritual renewal. Frank later heavily criticized Gurdjieff and his activities.

After a series of novels which were less successful than he thought they deserved, Frank turned his attention more to politics. He was widely acclaimed in Latin America, which he toured in 1929, in a lecture tour organized by, among others, Argentinian editor Samuel Glusberg and Peruvian cultural theorist José Carlos Mariátegui; the latter had serialized parts of Frank's Rediscovery of America (without Frank's authorization) in the important journal Amauta in 1927. Frank wrote South American Journey in 1943 and Birth of a World: Simon Bolivar in Terms of His Peoples in 1951. University of Delaware: WALDO FRANK PAPERS It was in South America that his literary impact was greatest.During a visit to Argentina in 1942 he denounced the pro-Nazi drift of the government of the time, and was declared a persona non-grata.