Abraham was born on August 15, 1924, the son of Stella K. and Dr. Samuel Abraham. He was raised to an Orthodox Jewish family in Long Beach, New York.

Abraham founded Thompson Medical, which introduced the Slim-Fast line of diet products in the late 1970s. Abraham made Thompson Medical private in 1988; Unilever acquired Slim-Fast for $2.3 billion in 2000. As of October 2016, he had an estimated wealth of US$2.1 billion.

Abraham is a long-time donor to the Democratic Party and the Clinton Foundation. He gave $1.5 million to the party and ranked as the number one contributor of soft money to the national parties in 2000.

Abraham endowed an S. Daniel Abraham Chair in Middle East Policy Studies at Princeton University and a Chair in Nutritional Medicine at Harvard University Medical School. He funded the Dan Abraham School for Business Administration and Economics at Bar-Ilan University in Israel, and the S. Daniel Abraham Israel Program at Yeshiva University, and Honors Program at Stern College for Women. He holds honorary doctorates from the Ben-Gurion University of the Negev, Bar-Ilan University and Yeshiva University. He is also the founder of the New Synagogue of Palm Beach. His gift to the Mayo Clinic served to create the Dan Abraham Healthy Living Center, whose opening in 2007 received national media coverage.

Abraham is the author of the book Peace is Possible, with a foreword by President Bill Clinton. Abraham also published his memoirs in 2010, entitled Everything is Possible: Life and Business Lessons from a Self-Made Billionaire and the Founder of Slim Fast.

Abraham donated $3 million to Priorities USA Action, a super PAC which supported Hillary Clinton's 2016 presidential campaign.