Schjeldahl was born in Fargo, North Dakota. He grew up in small towns throughout Minnesota, and attended Carleton College and The New School. He began his professional writing career as a reporter in Minnesota, Iowa and New Jersey.
In 1964 he traveled to Paris for a year before settling in New York City in 1965. Since coming to New York he has worked as an art critic for ARTnews, The New York Times, The Village Voice (1980 to 1998), and 7 Days (The Cooper Union). In 1998 he joined The New Yorker where he is currently the head art critic. His writings have also appeared in Artforum, Art in America, The New York Times Magazine, Vogue, and Vanity Fair. During his career Schjeldahl has written several books of poetry as well as art criticism. He taught at Harvard University in the Department of Visual and Environmental Studies for four years as well.
Schjeldahl’s poetry falls in line with many of the characteristic themes and styles of the New York School. As a contemporary postmodern poet, Schjeldahl believed that poetry should be enjoyed and understood by all readers. In an interview with the Virginia Commonwealth University’s Blackbird Schjeldahl commented on how "there are no rewards in being obscure or abstruse or overbearing" 
His poetry succeeds without a great deal of complexity in language usage or style while maintaining seriousness and poignancy. Schjeldahl’s poetry often addresses common experiences or familiar events. In his poem “My Generation” he opens: "Vietnam/ Drugs/ Civil Rights/ Rock/ Watergate/ (in that order?)/ Are the blows of history/ That have left my generation/ Its peculiar battered silhouette." Schjeldahl fuels his poetry with historical and biographical context, allowing audiences to relate more intimately to his subject.
In an interview with Blackbird, Schjeldahl stated, "writing things that people want to read is my bread and butter".
Schjeldahl was awarded a Guggenheim fellowship in 1995. In 1980 he received the Frank Jewett Mather Award for art criticism by the College Art Association. The Sterling and Francine Clark Art Institute named Peter Schjeldahl the winner of the 2008 Clark Prize for Excellence in Arts Writing. The prize was established in 2006 to recognize writers who advance public appreciation of visual art in a way that "is grounded in scholarship yet appeals to a broad range of audiences." It comes with a $25,000 honorarium and an award designed by architect Tadao Ando.
Carleton College bestowed an honorary degree, a Doctor of Humane Letters, honoris causa, to Schjeldahl as part of their commencement exercises on June 13, 2015.
Schjeldahl currently resides in New York. He is married to Donnie Brooke Alderson, a former actress. They have one child, Ada Calhoun Schjeldahl, who writes under the name Ada Calhoun.