Adam Michael Goldstein was born on March 30, 1973, in Philadelphia. His parents, Andrea and Herbert – both of whom were Jewish – had been unable to conceive children naturally, and they had adopted Goldstein's older sister Lara a year before his birth. Goldstein's mother left her husband temporarily after she caught him having extramarital sex with another man. During this time she had an affair herself, and she found out she was pregnant with Adam after returning to her husband. While heavily pregnant, she discovered her husband had been adulterous a second time, and then she angrily disclosed to him that he was not the biological father of her baby.

After watching Herbie Hancock perform "Rockit" with Grand Mixer DXT at the 26th Annual Grammy Awards in 1984, Goldstein became obsessed with deejaying, and realized that it was what he wanted to do for a career. He attended the Quaker school Friends' Central. When he was 14, Herbert was incarcerated for committing bank fraud, and his mother subsequently moved to Los Angeles with Goldstein and his sister.

After leaving rehab, Goldstein began attending raves and experimenting with MDMA and nitrous oxide. He also started deejaying; he broke into a friend's home while he was away for the weekend to practice on his turntables and eventually went on to practice freestyle deejaying every day for a whole summer. Goldstein started using crack cocaine by the age of 20. He said that taking the drug and deejaying were "about all he did" for the next four years of his life. He would often disappear from friends and family for days at a time. In 1997, he attempted suicide; the gun jammed in his mouth as he pulled the trigger. Shortly afterwards, a friend encouraged Goldstein to become sober. He began attending Alcoholics Anonymous (AA) meetings, avoided his friends who still took drugs, and dedicated himself to working as a DJ. Goldstein relapsed after 90 days, but subsequently restarted and completed the program. People who complete the AA program are encouraged to sponsor other addicts through the recovery process; Goldstein became a sponsor for several people.

Goldstein's stage name, "DJ AM", stands for his first and middle names, Adam Michael. After playing for his friends and at private parties for some time, Goldstein got his first paying job as a DJ at an unlicensed club in Los Angeles at the age of 21, where he earned $40 and a six-pack of beer for a night's work. He worked there for two years. A visiting promoter, impressed with Goldstein's performance, offered him a deejaying job at the Hollywood club The Dragonfly. Goldstein met Shifty Shellshock through the nightclub scene, and he was asked to join the rap/rock group Crazy Town in 1999. He contributed to their 2000 hit "Butterfly", which reached number one in several countries. According to bandmates Shellshock and Epic Mazur, Goldstein was the group's only sober member. He quit in 2001 to escape the drug-related dysfunction plaguing the group.

Goldstein's weight problems became progressively worse, despite years of dieting; in 2003, he weighed 324 lb (147 kg) and underwent gastric bypass surgery. The surgery was effective, and he lost more than 100 lb (45 kg) within a year. After he began dating Actress Nicole Richie in 2003, Goldstein's DJ career skyrocketed. Us Weekly Editor Janice Min said that he was talented, but that the thing that set him apart from other deejays was that he dated Richie.

As a result of the relationship, Goldstein appeared in a 2005 episode of Punk'd, where Richie was the subject of a practical joke, and that same year he featured in an episode of The Simple Life, a reality TV show focusing on Richie and Paris Hilton. Goldstein and Richie announced their engagement in February 2005, but broke up in late 2006. Goldstein was a guest DJ on an episode of The Ellen DeGeneres Show in May 2006. He was an avid sneakerhead, owning more than 1,000 pairs of sneakers by 2007. This led to him being offered a cameo as himself purchasing a pair in the 2006 TV series Entourage episode "What About Bob?". That same year, Goldstein also began working at Caesars Palace, becoming the resident DJ of their nightclub Pure. He was contracted to the club for the year for $1 million, which was considered to be an unprecedented amount for a DJ at the time. By 2007, he was also being paid between $10,000 and $25,000 per event as a solo DJ. Goldstein scratched on albums for Papa Roach, Will Smith and Babyface. He played at private events for celebrities including Jennifer Lopez, Ben Stiller and Leonardo DiCaprio. Goldstein dated singer Mandy Moore for two months in 2007 and remained close friends with her after separating. Later in 2007, he was romantically involved with model Jessica Stam.

In an interview with Glamour in 2008, Goldstein said that while he had been sober for nine years, he had to remind himself every day that he was still a drug addict, saying: "At any given moment, I'm five seconds away from walking up to someone, grabbing their drink out of their hand and downing it. And if I do that, within a week, tops, I'll be smoking crack." Following the plane crash, Goldstein was prescribed painkillers and anti-anxiety medication. Celebrity Doctor Drew Pinsky said it was those prescriptions which opened the "floodgates" to Goldstein's relapse. A friend of his reached the same conclusion, saying: "I think the plane crash killed him, it just took a year for it to do it." As a result of the plane crash, Goldstein developed a fear of flying, and continued taking anxiety medication to help deal with the regular flights his lifestyle required.

Goldstein posthumously won DJ of the Year at the 2009 BET Hip Hop Awards. In October 2009 he was depicted in the South Park episode "Dead Celebrities", along with other celebrities who died in mid-2009. Eminem, who nearly died from a methadone overdose in late 2007, paid tribute to Goldstein on the 2010 song "Talkin' 2 Myself", rapping: "Rest in peace to DJ AM/'cause I know what it's like/I struggle with this shit every single day." On the cover of the 2011 Blink-182 album, Neighborhoods, "DJ AM" can be seen written on one of the buildings, as a memorial. Wolfgang Gartner and will.i.am pay tribute to DJ AM in their 2011 single "Forever," which includes a moment of silence for him. Macklemore mentions DJ AM in his 2016 song "Drug Dealer," along with several other notable deaths from drug use.

Footage of Goldstein and several other celebrities are featured in the documentary films Downtown Calling (2009), and Electric Daisy Carnival Experience (2011). A documentary film about Goldstein titled As I AM: The Life and Times of DJ AM, was announced at the EDMbiz Conference on June 20, 2013. The film was directed by Kevin Kerslake and released in April 2015. Dennis Harvey of Variety called it an entertaining documentary, but thought, "there are some notable gaps left in the pic's posthumous understanding of DJ AM ... as its flashy surface doesn't always help us to understand the pure artistic soul he's depicted as here."

In Los Angeles, Goldstein associated with a crowd of heavy drug users. At 16, he approached his mother and asked for help with his drug problems. She arranged for him to attend Straight, Incorporated, a drug rehabilitation center that was later revealed to abuse patients. Goldstein disclosed that he was physically assaulted and spat on by staff while there. At one point, he escaped from the facility, but was arrested and brought back after being recognized at Knott's Berry Farm. While he was in rehab, his mother visited him and disclosed that Herbert was not his biological father, was homosexual, and was dying from HIV/AIDS. Goldstein said that after he received this news he "exploded," attacking one of his counselors. He was eventually indicted and dismissed from rehab for his treatment of younger patients shortly before his 18th birthday. Herbert died the following year.