Daniel Fuchs was born in the Lower East Side, Manhattan, but his family migrated to Williamsburg, Brooklyn while Fuchs was an infant. He wrote three early novels--Summer in Williamsburg (1934), Homage to Blenholt (1936), and Low Company (1937)--the earlier two of these depicting Jewish life in Williamsburg, the last focusing on various ethnic types in Brighton Beach. A single volume of these three novels, entitled The Brooklyn Novels, was published in 2006 by Black Sparrow Books, an imprint of David R. Godine, Publisher.

Homage to Blenholt concerns a well-meaning tenement schlemiel who hopes to escape poverty via various inventions and get-rich quick schemes. Fuchs also wrote short stories and personal essays, mainly for The New Yorker. When he was 26, he moved to Los Angeles, California to work on films.

Fuchs wrote the screenplay for the crime noir Criss Cross (1949). He also penned the psychodrama Panic in the Streets (1950), which was directed by Elia Kazan. In 1995, Criss Cross was remade as The Underneath by director Steven Soderbergh, with credit given to Fuchs. Love Me or Leave Me, a biopic about the torch singer Ruth Etting, which won Fuchs an Oscar for Best Story in 1955, featured a performance by James Cagney in the role of a Chicago hoodlum and Doris Day as the beleaguered songstress.

Fuchs' short Hollywood novel, "West of the Rockies", was published in 1971, and in 1979 appeared a collection of mostly earlier-written short stories, "The Apathetic Bookie Joint". The Golden West: Hollywood Stories, a collection of Fuchs's fiction and essays about Hollywood, was published in 2005 by Black Sparrow Books, an imprint of David R. Godine, Publisher.

Irving Howe wrote of Fuchs for Commentary Magazine in 1948 that "he showed such a rich gift for fictional portraiture of Jewish life in the American city that, given sustained work and growth of mind, he might have written its still-uncreated comedie humaine. After reading Fuchs' work one wonders: What was the source of his talent and the cause of his silence, and, perhaps more important, what was the relationship between his talent and his silence?"

John Updike has been quoted as saying, "Nobody else writes like Daniel Fuchs. I think of him as a natural—a poet who never had to strain after a poetic effect, a magician who made magic look almost too easy."