Druckenmiller was born in Pittsburgh, Pennsylvania, the son of Anne and Stanley Thomas Druckenmiller, a chemical Engineer. He grew up in a middle-class household in the suburbs of Philadelphia. His parents divorced when he was in elementary school and he went to live with his Father in Gibbstown, New Jersey (a section of Greenwich Township, Gloucester County, New Jersey) and then in Richmond, Virginia (his sisters, Helen and Salley, would stay with their mother in Philadelphia). Druckenmiller is a graduate of Collegiate School, Richmond, Virginia. In 1975, he received a BA in English and economics from Bowdoin College (where he opened a hot dog stand with Lawrence B. Lindsey, who later became economic policy adviser to President George W. Bush). He dropped out of a three-year Ph.D. program in economics at the University of Michigan in the middle of the second semester to accept a position as an oil analyst for Pittsburgh National Bank.

Druckenmiller has been married twice. In 1976, he married his high school sweetheart; they divorced in 1980. In 1988, Druckenmiller married Fiona Katharine Biggs, niece of investor Barton Biggs, in an Episcopalian ceremony. Druckenmiller has three daughters with Biggs.

Druckenmiller began his financial career in 1977 as a management trainee at Pittsburgh National Bank. He became head of the bank's equity research group after one year. In 1981, he founded his own firm, Duquesne Capital Management.

From 1988 to 2000, he managed money for George Soros as the lead portfolio manager for Quantum Fund. He is reported to have made $260 million in 2008.

Druckenmiller and his wife are also principal sponsors of the New York City AIDS walk. The Stanley F. Druckenmiller Hall, built in 1997 at Bowdoin College, is named after Druckenmiller's grandfather and was dedicated to Bowdoin by Druckenmiller himself.

Druckenmiller is also Chairman of the Board of Harlem Children's Zone, a multi-faceted, community-based project. Harlem Children's Zone was founded by Druckenmiller's college friend and fellow Bowdoin College alumnus Geoffrey Canada. In 2006, Druckenmiller gave $25 million to the organization. In 2013, Druckenmiller and Canada toured college campuses urging reform in taxation, health care, and Social Security to ensure intergenerational equity.

In July 2008, Druckenmiller emerged as a potential investor in the Pittsburgh Steelers franchise of the National Football League. The five sons of Steelers founder Art Rooney Sr. were working to restructure ownership of the team, and Druckenmiller was contacted by a member or representative of the Rooney family about buying the shares of several of the Rooney brothers. On September 18, Druckenmiller withdrew his bid to purchase the team.

In 2009, Druckenmiller was the most charitable man in America, giving $705 million to foundations that support medical research, education, and anti-poverty, including a $100 million gift to found a Neuroscience Institute at NYU School of Medicine.

According to the Wall Street Journal, on August 18, 2010 Druckenmiller "told clients that he's returning their money and ending his firm's 30-year run, citing the 'high emotional toll' of not performing up to his own expectations." He indicated it was not easy to make big profits while handling very large sums of money.

Druckenmiller advocates reducing spending on entitlement programs such as Social Security. Druckenmiller was a major supporter of Republican Governor Chris Christie of New Jersey. In 2015, Druckenmiller donated $300,000 total to the presidential candidacies of Christie, Jeb Bush, and John Kasich.