John Crowley was born in Presque Isle, Maine, in 1942; his father was then an officer in the US Army Air Corps. He grew up in Vermont, northeastern Kentucky and (for the longest stretch) Indiana, where he went to high school and college. He moved to New York City after college to make movies, and did find work in documentary films, an occupation he still pursues. He published his first novel (The Deep) in 1975, and his 12th volume of fiction (Four Freedoms) in 2009. Since 1993 he has taught creative writing at Yale University. In 1992 he received the Award in Literature from the American Academy and Institute of Arts and Letters.

His first published novels were science fiction: The Deep (1975) and Beasts (1976). Engine Summer (1979) was nominated for the 1980 American Book Award in a one-year category Science Fiction; it appears in David Pringle's Science Fiction: The 100 Best Novels. In 1981 came Little, Big, covered in Pringle's sequel, Modern Fantasy: The 100 Best Novels.

He is best known as the author of Little, Big (1981), which received the World Fantasy Award for Best Novel and has been called "a neglected masterpiece" by Harold Bloom, and his Ægypt series of novels which revolve around the same themes of Hermeticism, memory, families and religion.

In 1987 Crowley embarked on an ambitious four-volume novel, Ægypt, comprising The Solitudes (originally published as Ægypt), Love & Sleep, Dæmonomania, and Endless Things, published in May 2007. This series and Little, Big were cited when Crowley received the prestigious American Academy of Arts and Letters Award for Literature.

In 1989 Crowley and his wife Laurie Block founded Straight Ahead Pictures to produce media (film, video, radio and internet) on American history and culture. Crowley has written scripts for short films and documentaries, many historical documentaries for public television; his work has received numerous awards and has been shown at the New York Film Festival, the Berlin Film Festival, and many others. His scripts include The World of Tomorrow (on the 1939 World's Fair), No Place to Hide (on the bomb shelter obsession), The Hindenburg (for HBO), and FIT: Episodes in the History of the Body (American fitness practices and beliefs over the decades; with Laurie Block).

Crowley's correspondence with literary critic Harold Bloom, and their mutual appreciation, led in 1993 to Crowley taking up a post at Yale University, where he teaches courses in Utopian fiction, fiction writing, and screenplay writing. Bloom claimed on Contentville.com that Little, Big ranks among the five best novels by a living Writer, and included Little, Big, Ægypt (The Solitudes), and Love & Sleep in his canon of literature (in the appendix to The Western Canon, 1994). In his Preface to Snake's-Hands, Bloom identifies Crowley as his "favorite contemporary writer", and the Ægypt series as his "favorite romance...after Little, Big".

Crowley wrote the bi-monthly "Easy Chair" essay in Harper's Magazine for a year; his last column appeared in the February 2016 issue.

Crowley’s short fiction is collected in three volumes: Novelty (containing the World Fantasy Award-winning novella Great Work of Time), Antiquities, and Novelties & Souvenirs, an omnibus volume containing nearly all his short fiction through its publication in 2004. A collection of essays and reviews entitled In Other Words was published in early 2007.