Norman Finkelstein was born in Brooklyn in 1953 to Holocaust survivors Mary and Zacharias Finkelstein. He attended James Madison High School followed by Binghamton College, where he graduated in 1974 with a degree in History. Finkelstein enrolled at Princeton University where he earned a Master's degree in political science and a PhD in political studies in 1988. He also studied at the École Pratique des Hautes Études in Paris.

After graduation Finkelstein held teaching positions at various universities including New York University, Brooklyn College and Hunter College. His dissertation, The Jewish Question to the Jewish State: An Essay on the Theory of Zionism became the foundation for his first book, Image and Reality of the Israel-Palestine Conflict (Verso, 1995), a critical analysis of Joan Peters' From Time Immemorial: The Origins of the Arab-Jewish Conflict over Palestine (Harpercollins, 1984). The book earned both criticism and support from the academic community, with public figures such as Noam Chomsky coming to Finkelstein's defense. Image and Reality was followed by The Rise and Fall of Palestine: A personal account of the intifada years (University of Minnesota, 1996) and A Nation on Trial: The Goldhagen thesis and historical truth (with Ruth Bettina Birn) (Henry Holt, 1998).

In 2000 Finkelstein released his most publicized book to date, The Holocaust Industry: Reflections on the Exploitation of Jewish Suffering (Verso, 2000). Finkelstein argued that the memory of the Holocaust was being exploited by the American Jewish community for financial gain while allowing Israel to commit human rights abuses unchecked. While the book received some positive reviews it also brought accusations of holocaust denial and the possibility of exploitation for anti-Semitic purposes.

In 2001 Finkelstein accepted a teaching position at DePaul University's College of Liberal Arts and Social Sciences. His continued advocacy for the people of Palestine and criticism of Israeli human rights policies made him a prominent voice in the ongoing conflict. In 2003 Harvard professor Alan Dershowitz released The Case for Israel (John Wiley & Sons), prompting a rebuttal from Finkelstein that played out in the press and resulted in Finkelstein's next book, Beyond Chutzpah: On the misuse of anti-Semitism and the abuse of history (University of California Press, 2005). Finkelstein accused Dershowitz of plagiarizing portions of Peters' From Time Immemorial and even questioning the book's authorship, causing Dershowitz to threaten legal action against the publisher. Beyond Chutzpah was released without the word "plagiarism" and did not include accusations about The Case for Israel's authorship.

Finkelstein became eligible for tenure at DePaul University in 2007. In September of that year Dershowitz began contacting various university employees and alumni in an effort to block Finkelstein's tenure bid. Although he was initially approved, a minority report was filed by several faculty members and Finkelstein was ultimately denied. Despite ongoing support from students and colleagues he was placed on leave and submitted his resignation in September 2007. DePaul insisted Dershowitz's interference didn't influence the decision.

After leaving DePaul Finkelstein returned to Brooklyn, where he continues to publish and speak on Middle East relations. His books have been translated into more than 50 foreign editions. Finkelstein's life and career was the subject of a 2009 award winning documentary, American Radical: The Trials of Norman Finkelstein, directed by David Ridgen and Nicolas Rossier. He was also the subject of the 2017 Off-Broadway production, If I Forget, written by Steven Levenson.