Dern was born in Chicago, Illinois to John Dern and Jean MacLeish. His paternal grandfather was George Dern, a former Utah governor and Secretary of War, his uncle was poet Archibald MacLeish, and his Godfather was well-known politician Adlai Stevenson.

Dern is generally regarded as a talented actor who has suffered from typecasting, due to having had a series of roles as mentally unstable characters early in his film career. His best-known role may be as the last surviving astronaut in Silent Running (1971). He was nominated for a Best Supporting Actor Oscar for his role in the multi-Oscar-winning Coming Home (1978) with Jane Fonda. He was also nominated for the "Best Actor" prize at the Berlin Film Festival for That Championship Season (1982).

Dern is the father of actress Laura Dern and was formerly married to actress Diane Ladd.