Dennett was born on March 28, 1942 in Boston, Massachusetts, the son of Ruth Marjorie (née Leck) and Daniel Clement Dennett, Jr. Dennett spent part of his childhood in Lebanon, where, during World War II, his father was a covert counter-intelligence agent with the Office of Strategic Services posing as a cultural attaché to the American Embassy in Beirut. When he was five, his mother took him back to Massachusetts after his father died in an unexplained plane crash. Dennett's sister is the investigative Journalist Charlotte Dennett. Dennett says that he was first introduced to the notion of philosophy while attending summer camp at age 11, when a camp counselor said to him, "You know what you are, Daniel? You're a Philosopher."

Dennett graduated from Phillips Exeter Academy in 1959, and spent one year at Wesleyan University before receiving his Bachelor of Arts in philosophy at Harvard University in 1963. At Harvard University he was a student of W. V. Quine. In 1965, he received his Doctor of Philosophy in philosophy at the University of Oxford, where he studied under Gilbert Ryle and was a member of Hertford College. His dissertation was entitled "The Mind and the Brain: Introspective Description in the Light of Neurological Findings; Intentionality".

Dennett married Susan Bell in 1962. They live in North Andover, Massachusetts, and have a daughter, a son, and five grandchildren.

Much of Dennett's work since the 1990s has been concerned with fleshing out his previous ideas by addressing the same topics from an evolutionary standpoint, from what distinguishes human minds from animal minds (Kinds of Minds), to how free will is compatible with a naturalist view of the world (Freedom Evolves).

He is the recipient of a Fulbright Fellowship, two Guggenheim Fellowships, and a Fellowship at the Center for Advanced Study in the Behavioral Sciences. He is a Fellow of the Committee for Skeptical Inquiry and a Humanist Laureate of the International Academy of Humanism. He was named 2004 Humanist of the Year by the American Humanist Association.

In his 2006 book, Breaking the Spell: Religion as a Natural Phenomenon, Dennett attempts to account for religious belief naturalistically, explaining possible evolutionary reasons for the phenomenon of religious adherence. In this book he declares himself to be "a bright", and defends the term.

He has also written about and advocated the notion of memetics as a philosophically useful tool, most recently in his "Brains, Computers, and Minds", a three-part presentation through Harvard's MBB 2009 Distinguished Lecture Series.

In February 2010, he was named to the Freedom From Religion Foundation's Honorary Board of distinguished achievers.

In 2012, he was awarded the Erasmus Prize, an annual award for a person who has made an exceptional contribution to European culture, society or social science, "for his ability to translate the cultural significance of science and Technology to a broad audience."

He has been doing research into clerics who are secretly atheists and how they rationalize their works. He found what he called a "Don't ask, don't tell" conspiracy because believers did not want to hear of loss of faith. That made unbelieving Preachers feel isolated but they did not want to lose their jobs and sometimes their church-supplied lodgings and generally consoled themselves that they were doing good in their pastoral roles by providing comfort and required ritual. The research, with Linda LaScola, was further extended to include other denominations and non-Christian clerics. The research and stories Dennett and LaScola accumulated during this project were published in their 2013 co-authored book, Caught in the Pulpit: Leaving Belief Behind.

Dennett self-identifies with a few terms: "[Others] note that my 'avoidance of the standard philosophical terminology for discussing such matters' often creates problems for me; Philosophers have a hard time figuring out what I am saying and what I am denying. My refusal to play ball with my colleagues is deliberate, of course, since I view the standard philosophical terminology as worse than useless—a major obstacle to progress since it consists of so many errors."

As of 2017, he is the co-director of the Center for Cognitive Studies and the Austin B. Fletcher Professor of Philosophy at Tufts University. Dennett is an atheist and secularist, a member of the Secular Coalition for America advisory board, and a member of the Committee for Skeptical Inquiry, as well as an outspoken supporter of the Brights movement. Dennett is referred to as one of the "Four Horsemen of New Atheism", along with Richard Dawkins, Sam Harris, and the late Christopher Hitchens.