Paul Schrader was raised in Michigan by strict Calvinists and didn't see a movie until he was 18 years old. After graduating from film school in Los Angeles he worked as a film critic until selling his first script in 1975, The Yakuza. The next year he wrote the screenplay for Martin Scorsese's Taxi Driver, the success of which led to his 1978 directorial debut, Blue Collar. Known for his depictions of desperate men with moral ambivalence, he has written several screenplays, including three more with Scorsese: Raging Bull (1980, starring Robert DeNiro), The Last Temptation of Christ (1988, starring Willem Dafoe) and Bringing Out the Dead (1999, starring Nicolas Cage). He has also directed movies, often from his own scripts, including American Gigolo (1980, starring Lauren Hutton and Richard Gere), Affliction (1997, starring Nick Nolte) and a biopic of Bob Crane, Auto-Focus (2002, with Greg Kinnear as Crane).

Schrader's older brother, Leonard, is also a screenwriter and film director, and they have worked together on several films, including Mishima: A Life in Four Chapters, the 1985 movie about Japanese writer Yukio Mishima... Schrader has been married to actress Mary Beth Hurt since 1983.