D'Amato was born in Brooklyn and raised on Long Island. He is a graduate of Chaminade High School, Syracuse University, and Syracuse Law School. He is a brother of the Alpha Chi Rho fraternity. His political career started with the Nassau County Republican Party, and he held the appointive position of Public Administrator of Nassau County, where he was responsible for managing the assets of county residents who died without wills. He was first appointed and then elected Receiver of Taxes of Hempstead, New York. He left this office to become a town supervisor in Hempstead and in 1977 he was elected presiding supervisor.

As a rather obscure candidate, he then defeated incumbent Sen. Jacob Javits in the 1980 Republican primary election, taking advantage of Javits' 1979 diagnosis of generally fatal amytrophic lateral sclerosis. Javits nevertheless pursued the seat on the Liberal Party ticket, splitting the left-wing vote in ordinarily liberal New York with Democratic Congresswoman Elizabeth Holtzman and leading to D'Amato's 45 lurality victory. This victory is largely credited to his campaign manager, Arthur J. Finkelstein.

D'Amato drew the nickname Senator Pothole for his delivery of "constituent services," helping citizens with their individual cases. Many New Yorkers meant the nickname as a pejorative; D'Amato had a reputation for focusing on constituent service mostly during election years.

Senator D'Amato also hold the record for the second and seventh longest filibusters ever recorded in the United States Senate. He is remembered for his unique and rather comical filibusters. In 1986, a filibuster he conducted against a military bill lasted 23 hours, 30 minutes and he was known for reading the District of Columbia phonebook during a filibuster. On another occasion he once filibustered a bill that would have caused the loss of 750 jobs in upstate New York by singing "South of the Border (Down Mexico Way)"

He was a member of the President's Commission on Aviation Security and Terrorism (PCAST) which was set up in September 1989 to review and report on aviation security policy in the light of the sabotage of Pan Am Flight 103 on December 21, 1988.

While he was in office, he was chairman of the Senate Committee on Banking, Housing and Urban Affairs, and was a member of the Senate Finance Committee. As a member of the latter, he championed the cause of Holocaust survivors trying to recover relatives' funds from accounts in Swiss banks.

D'Amato is divorced from his first wife, with whom he has four children. He has dated several well-known personalities, including entertainment television reporter Claudia Cohen. On July 18, 2004 he married Katuria Elizabeth Smith. He is now managing director of Computer Associates.

D'Amato was known for being fairly conservative, a reflection of then conservative-leaning Nassau County yet very popular among New York's liberal voters. He strongly supported the conservative positions of his party on "law and order" issues such as capital punishment and harsh penalties for drug offenses. On some issues he agreed with the opposition: in 1993 D'Amato was one of only three Republicans to vote in favor of allowing gays to serve openly in the U.S. military. In 1996 he was among the minority of Republicans to vote to extend federal protections against discrimination in hiring to homosexuals. On labor issues too he frequently sided with Democrats. His 1998 loss was attributed to a lack of support among moderate voters in New York City, where opponent Charles Schumer was a Representative. Another factor contributing to his loss was his labeling of Rep. Schumer as a "putz-head," which means "fool" or "penis-head" in Yiddish. This was ironic on several levels: first, D'Amato had previously had much Jewish support because of his efforts to help Holocaust survivors. Second, D'Amato won in 1992 for the same reason he lost in 1998; his 1992 opponent, then-attorney general Robert Abrams, called D'Amato a "fascist," which people (including D'Amato himself) interpreted as an ethnic slur because D'Amato is Italian.

D'Amato's decline may also have mirrored that of Nassau County's Republicans. In 2001, after years of alleged scandal and financial mismanagement, Republicans lost control of the county legislature for the first time in 40 years, and Democrat Thomas Suozzi was elected County Executive.