Saul David Alinsky was born in 1909 in Chicago, Illinois, to Russian Jewish immigrant parents, the only surviving son of Benjamin Alinsky's marriage to his second wife, Sarah Tannenbaum Alinsky. Alinsky stated during an interview that his parents never became involved in the "new socialist movement." He added that they were "strict Orthodox, their whole life revolved around work and synagogue ... I remember as a kid being told how important it was to study." He attended Marshall High School in Chicago until his parents divorced and then went to live with his Father who moved to California, graduating from Hollywood High School in 1926.

In the 1930s Alinsky organized the Back of the Yards neighborhood in Chicago (made infamous by Upton Sinclair's 1906 novel, The Jungle, which described the horrific working conditions in the Union Stock Yards). He went on to found the Industrial Areas Foundation (IAF) while organizing the Woodlawn neighborhood; IAF trained organizers and assisted in the founding of community organizations around the United States.

After attending two years of graduate school at the University of Chicago, he accepted work for the state of Illinois as a criminologist. On a part-time basis, he also began working as an organizer with the Congress of Industrial Organizations (CIO). By 1939, he became less active in the labor movement and became more active in general community organizing, starting with the Back of the Yards and other poor areas on the South Side of Chicago. His early efforts to "turn scattered, voiceless discontent into a united protest" earned the admiration of Illinois governor Adlai Stevenson, who said Alinsky's aims "most faithfully reflect our ideals of brotherhood, tolerance, charity and dignity of the individual."

The documentary The Democratic Promise: Saul Alinsky and His Legacy states that "Alinsky championed new ways to organize the poor and powerless that created a backyard revolution in cities across America." Based on his organizing in Chicago, Alinsky formed the Industrial Areas Foundation (IAF) in 1940. After he died, Edward T. Chambers became its executive Director. Hundreds of professional community and labor organizers and thousands of community and labor Leaders have been trained at its workshops. Fred Ross, who worked for Alinsky, was the principal mentor for Cesar Chavez and Dolores Huerta. Other organizations following in the tradition of the Congregation-based Community Organizing pioneered by IAF include PICO National Network, Gamaliel Foundation, Brooklyn Ecumenical Cooperatives, founded by former IAF trainer, Richard Harmon and Direct Action and Research Training Center (DART).

As a result of his efforts and success at helping slum communities, Alinsky spent the next 10 years repeating his organization work across the nation, "from Kansas City and Detroit to the barrios of Southern California." By 1950 he turned his attention to the black ghettos of Chicago. His actions aroused the ire of Mayor Richard J. Daley, who also acknowledged that "Alinsky loves Chicago the same as I do." He traveled to California at the request of the San Francisco Bay Area Presbyterian Churches to help organize the black ghetto in Oakland. Hearing of his plans, "the panic-stricken Oakland City Council promptly introduced a resolution banning him from the city."

Several prominent American Leaders have been influenced by Alinsky's teachings, including Ed Chambers, Tom Gaudette, Ernesto Cortes, Michael Gecan, Wade Rathke, and Patrick Crowley. Alinsky is often credited with laying the foundation for the grassroots political organizing that dominated the 1960s. Jack Newfield, writing in New York magazine, included Alinsky among "the purest Avatars of the populist movement", along with Ralph Nader, Cesar Chavez, and Jesse Jackson.

In 1969, Alinsky was awarded the Pacem in Terris Peace and Freedom Award, an annual award given by the Diocese of Davenport to commemorate an encyclical by Pope John XXIII.

In Rules for Radicals (his final work, published in 1971 one year before his death), Alinsky wrote at the end of his personal acknowledgements:

Alinsky died at the age of 63 from a heart attack near his home in Carmel, California, on June 12, 1972. He was cremated in Carmel and his ashes were interred at Mt. Mayriv Cemetery (the cemetery is now included in Zion Gardens Cemetery) in Chicago. Shortly before his death he had discussed life after death in Playboy:

According to Alinsky biographer Sanford Horwitt, U.S. President Barack Obama was influenced by Alinsky and followed in his footsteps as a Chicago-based community organizer. Horwitt asserted that Barack Obama's 2008 presidential campaign was influenced by Alinsky's teachings. Alinsky's influence on Obama has been heavily emphasized by some of his detractors, such as Rush Limbaugh and Glenn Beck. Historian Thomas Sugrue writes, "as with all conspiracy theories, the Alinsky-Obama link rests on a kernel of truth". For three years in the mid 80s, Obama worked for the Developing Communities Project, which was influenced by Alinsky's work, and he wrote an essay that was collected in a book memorializing Alinsky. Newt Gingrich repeatedly stated his opinion that Alinsky was a major influence on Obama during his 2012 presidential campaign, equating Alinsky with "European Socialism", although Alinsky was U.S.-born and was not a Socialist. Gingrich's campaign itself used tactics described by Alinsky's writing.

Adam Brandon, a spokesman for the conservative non-profit organization FreedomWorks, one of several groups involved in organizing Tea Party protests, says the group gives Alinsky's Rules for Radicals to its top leadership members. A shortened guide called Rules for Patriots is distributed to its entire network. In a January 2012 story that appeared in The Wall Street Journal, citing the organization's tactic of sending Activists to town-hall meetings, Brandon explained, "[Alinsky's] tactics when it comes to grass-roots organizing are incredibly effective." Former Republican House Majority Leader Dick Armey also gives copies of Alinsky's book Rules for Radicals to Tea Party Leaders.

He did not have much respect for mainstream political Leaders who tried to interfere with growing black–white unity during the difficult years of the Great Depression. In Alinsky's view, new voices and new values were being heard in the U.S., and "people began citing John Donne's 'No man is an island.'" He observed that the hardship affecting all classes of the population was causing them to start "banding together to improve their lives" and discovering how much in Common they really had with their fellow man.