Hotchner was born in St. Louis, Missouri, the son of Sally (née Rossman), a Sunday school administrator, and Samuel Hotchner, a jeweler and lawyer. He attended Soldan High School. In 1940, he graduated from Washington University in St. Louis with degrees in both history (A.B.) and law (J.D.). He was admitted to the Missouri State Bar in 1941, and briefly practiced law in St. Louis in 1941–42. After the outbreak of World War II, he served in the U.S. Army Air Corps as a journalist, attaining the rank of major. When the war was over, he decided to forgo law and pursue a career in writing.
Hotchner has been an editor, biographer, novelist and playwright. In 1948, he met Ernest Hemingway, and the two were close friends until Hemingway's death in 1961. Hotchner is perhaps best known for Papa Hemingway, his 1966 biography of Hemingway, whose work he had also adapted for plays and television.
In 1982, with his friend and neighbor, actor Paul Newman, Hotchner founded Newman's Own, Inc. All profits from this successful line of food products and other ventures are donated to charities.
In 1988, Hotchner and Newman also co-founded the Hole in the Wall Gang Camp, a residential summer camp and year-round center for seriously ill children located in Ashford, Connecticut. The original camp was later expanded to become a number of other Hole in the Wall Camps at other locations in the U.S., Ireland, France, and Israel. The camps serve 13,000 children every year, free of charge.