Douglas Eaglesham Dunn was born on 23 October 1942 in Inchinnan, Renfrewshire, and educated at Renfrew High School and Camphill School, Paisley. On leaving school he entered librarianship, working in Renfrew County Libraries and the Andersonian Library, University of Strathclyde, and qualifying as Associate of the Library Association at the Scottish School of Librarianship in 1962. He married in 1964 and the couple left for America, where Dunn worked in Akron Public Library, Ohio. They returned to Britain in 1966, since Dunn would otherwise have been caught up in the Vietnam draft.

He entered the University of Hull to study English, graduating with first class honours in 1969, and his first collection of poetry, Terry Street, was published in the same year. He worked for two years in the Brynmor Jones Library at Hull, where the poet Philip Larkin was university librarian. Larkin's influence has been found in Dunn's earlier work, though at the time Dunn expressed amused irritation at being regarded as 'the other poet from Hull'.

Dunn became a freelance writer in 1971 and has since written poetry, short stories and plays, as well as editing several anthologies of poetry and fiction. Among other awards for his work, he received the Somerset Maugham Award in 1972 and the Hawthornden Prize in 1981. The early death of his wife from cancer in 1981 was the trigger for his poetic sequence Elegies, which was Whitbread Book of the Year in 1985.

Dunn married again in 1984 and moved back to Scotland. After holding several writer-in-residence posts, he became Professor of English and Director of the Scottish Studies Institute at the University of St Andrews. He became a Fellow of the Royal Society of Literature in 1981 and holds honorary doctorates from Dundee and Hull. He received the OBE in 2003.