D'Souza was born in Bombay in 1961. His parents were Roman Catholics from the state of Goa in Western India, where his father was an executive of Johnson & Johnson and his mother was a housewife. D'Souza attended the Jesuit St. Stanislaus High School in Bombay. He graduated in 1976 and completed his 11th and 12th years at Sydenham College, also in Bombay. In 1978, D'Souza traveled to the United States under the Rotary Youth Exchange and attended the local public school in Patagonia, Arizona. He went on to matriculate at Dartmouth College, where he graduated with a Bachelor of Arts in English in 1983 and was a member of Phi Beta Kappa. While at Dartmouth, D'Souza wrote for The Dartmouth Review, an independent publication, not affiliated with Dartmouth College, subsidized by alumni and edited by students.

From 1985 to 1987, D'Souza was a contributing Editor for Policy Review, a journal then published by The Heritage Foundation in Washington, D.C. In a September 1985 article titled "The Bishops as Pawns," D'Souza theorized that Catholic bishops in the United States were being manipulated by American liberals in agreeing to oppose the U.S. military buildup and use of power abroad when, D'Souza believed, they knew very little about these subjects to which they were lending their religious credibility:

He was a policy adviser in the administration of President Ronald Reagan between 1987 and 1988.

In 1991, D'Souza became a naturalized United States citizen.

In 1992, D'Souza married Dixie Brubaker, whom he first met when he worked in Washington, D.C. They have one daughter, born in 1995. In his book Life After Death: The Evidence, D'Souza stated that Brubaker had a near-death experience at the age of 19. The couple lived together in California until D'Souza moved to New York as President of King's College. He maintained a residence near San Diego, where his wife and daughter remained.

D'Souza attended the evangelical church Calvary Chapel from 2000 at least until 2010. D'Souza says that his Catholic background is important to him, but he is also comfortable with Protestant Reformation theology; he identifies as a nondenominational Christian. He often writes and discusses Christian apologetics and has debated against prominent atheists and critics of Christianity, including Dan Barker, Christopher Hitchens, Peter Singer, Daniel Dennett, Michael Shermer, David Silverman, and Bart D. Ehrman on religious and moral issues.

D'Souza has appeared on numerous national television networks and programs. Six days after the September 11, 2001, attacks, D'Souza appeared on Politically Incorrect hosted by Bill Maher. He disputed the assertion that terrorists were cowards by saying, "Look at what they did. You have a whole bunch of guys who were willing to give their life; none of them backed out. All of them slammed themselves into pieces of concrete. These are warriors." Maher agreed with D'Souza's comments and said, "We have been the cowards. Lobbing cruise missiles from two thousand miles away."

In a 2003 interview, he said same-sex marriage did not work:

In early 2007, D'Souza published The Enemy at Home: The Cultural Left and its Responsibility for 9/11, in which he argues that the American cultural left was in large part responsible for the Muslim anger that led to the September 11 attacks. He argues that Muslims do not hate America because of its freedom and democracy, but because they perceive America to be imposing its moral depravity (support for sexual licentiousness) on the world. D'Souza's conclusion is that,

D'Souza's book The Roots of Obama's Rage, of which the Forbes article was a condensed version, was published in September 2010 by Regnery Publishing. The book presents his interpretation of Obama's past and how it formed his beliefs; it was on The New York Times Best Seller list for four weeks in October–November 2010. D'Souza appeared on the Glenn Beck Program in September 2010 to discuss some of his theories.

After D'Souza's indiscretion became public, the trustees of the King's College announced after meeting on October 17, 2012, that D'Souza had resigned his position as President of the university "to attend to his personal and family needs". Smith noted that D'Souza filed for divorce on the date of Smith's inquiry. D'Souza and Brubaker subsequently divorced.

In March 2013, D'Souza announced work on a documentary film titled America: Imagine the World Without Her for release in 2014. America was marketed to political conservatives and through Christian marketing firms. The Washington Times states that D'Souza is saying that Americans no longer have past heroes like Washington, Lincoln, and Reagan, but "we do have us" in "our struggle for the restoration of America."

In May 2014, D'Souza pleaded guilty to one felony count of making illegal contributions in the names of others. In September 2014, the court sentenced D'Souza to five years probation, eight months in a halfway house (referred to as a "community confinement center") and a $30,000 fine.

D'Souza married Deborah Fancher, a conservative political Activist and mother of two, on March 19, 2016. The wedding was held near San Diego, California with Pastor Rafael Cruz, father of U.S. Senator Ted Cruz (R-TX), officiating. Fancher, 50, immigrated from Venezuela at age 10.

On January 23, 2017 the film was nominated for five Razzies including: Worst Picture, Worst Actor (Dinesh D'Souza), Worst Actress (Becky Turner), Worst Director (Dinesh D'Souza and Bruce Schooley), and Worst Screenplay. In response to the Razzie nominations, D'Souza stated that he was "actually quite honored" and called the nominations "petty revenge" in response to Trump's election victory, also stating that "the film might have played an important role in the election." After "winning" four of the five possible Razzies, D'Souza repeated his view that the nominations were awarded in response to Trump's election victory.

In February 2018, D'Souza was widely criticized for a series of tweets which mocked the survivors of the Stoneman Douglas High School shooting. In response to a photo of survivors reacting to Florida lawmakers voting down a proposed ban on assault weapons in the aftermath of the shooting, D'Souza tweeted "worst news since their parents told them to get summer jobs". D'Souza's comments were condemned by both liberal and conservative commentators. Jonathan M. Katz wrote "Let it never be said that Dinesh does not actively root for the death of children." Others accused D'Souza of "trolling kids". D'Souza was also denounced by Conservative Political Action Conference, which removed him from the roster of speakers, and called his comments "indefensible".

John Fund of National Review said the documentary was a response to U.S. progressive critique of the country, "D'Souza's film and his accompanying book are a no-holds-barred assault on the contemporary doctrine of political correctness." Fund said D'Souza's message was "deeply pessimistic" but concluded, "Most people will leave the theater with a more optimistic conclusion: Much of the criticism of America taught in the nation’s schools is easily refuted, America is worth saving, and we have the tools to do so in our DNA, just waiting to be harnessed." National Review's Jay Nordlinger said, "Dinesh is the anti-Moore: taking to the big screen to press conservative points... The shame narrators (let’s call them) focus on maybe 20 percent of the American story. Dinesh simply puts the other 80 percent back in." In a second article, Jay Nordlinger said, "The second movie confirms for me that one of Dinesh's great advantages is that he is absolutely clear-eyed about the Third World. While liberal Americans romanticize it, he has lived it."