Kureishi was born in Bromley, South London, to a Pakistani father, Rafiushan (Shanoo) Kureishi, and an English mother, Audrey Buss. His father was from a wealthy Madras family, most of whose members moved to Pakistan after the Partition of British India in 1947. Rafiushan came to the UK in 1950 to study law but for financial reasons worked at the Pakistani embassy instead. Here he met his wife-to-be, Buss. He wanted to be a Writer but his ambitions were frustrated. The couple were married, the family settled in Bromley where Kureishi was born. In interview, Kureishi notes:

Kureishi started his career in the 1970s as a pornography Writer, under the pseudonyms Antonia French and Karim. He went on to write plays for the Hampstead Theatre, Soho Poly and by the age of 18 was with the Royal Court. He wrote My Beautiful Laundrette in 1985, a screenplay about a gay Pakistani-British boy growing up in 1980s London for a film directed by Stephen Frears. The screenplay, especially the racial discrimination experienced, contained elements from Hanif's own experiences as the only Pakistani student in his class at school. It won the New York Film Critics Best Screenplay Award and an Academy Award nomination for Best Screenplay. He also wrote the screenplay for Sammy and Rosie Get Laid (1987). His book The Buddha of Suburbia (1990) won the Whitbread Award for the best first novel and was made into a BBC television series with a Soundtrack by David Bowie. 1991 saw the release of the feature film entitled London Kills Me, written and directed by Kureishi.

Hanif Kureishi attended Bromley Technical High School and studied for A-levels at Bromley College of Technology. While at this college he was elected as Student Union President (1972) and some of the characters from his semi-autobiographical work The Buddha of Suburbia are from this period. He went on to spend a year studying philosophy at Lancaster University before dropping out. Later he attended King's College London and took a degree in philosophy.

His novel Intimacy (1998) revolved around the story of a man leaving his wife and two young sons after feeling physically and emotionally rejected by his wife. This created some controversy as Kureishi had recently left his own partner (the Editor and Producer Tracey Scoffield) and two young sons; it was assumed to be at least semi-autobiographical. In 2000/2001 the novel was adapted to a movie Intimacy by Patrice Chéreau, which won two Bears at the Berlin Film Festival: a Golden Bear for Best Film and a Silver Bear for Best Actress (Kerry Fox). It was controversial for its explicit sex scenes. The book was translated into Persian by Niki Karimi in 2005.

Kureishi has twin boys (from his relationship with film Producer Tracey Scoffield) and a younger son. Kureishi currently lives in West London. He was appointed Commander of the Order of the British Empire (CBE) in the 2008 New Year Honours. In 2013, Kureishi lost his life savings, intended to cover "the ups and downs of being a writer", in a suspected fraud. Although he acknowledges his father's Pakistani roots (originating in Madras, in British India, present-day Chennai, India), he rarely visits Pakistan. Upon a 2012 visit sponsored by the British Council, he acknowledged that it was his first trip to Pakistan in 20 years.

In 2013 Kureishi was appointed as a professor in the creative writing department at Kingston University in London, where he was a Writer in Residence. However, at The Independent Bath Literature Festival, 2 March 2014, he stated that creative writing courses were a "waste of time" and commented that 99.9 per cent of his students were talentless. In 2014 the British Library announced that they would be acquiring the archive of Kureishi's documents spanning 40 years of his writing life. The body of work will include diaries, notebooks and drafts.

Kureishi has also written non-fiction, including autobiography. As noted by Cathy Galvin in The Telegraph: "But at the core of his life, as described in his memoir, My Ear at His Heart, is Kureishi’s relationship with his father, Rafiushan, who died in 1991."