Purdy was born in Ohio and moved to Chicago when he was still in his teens. He attended the University of Chicago and the University of Puebla in Mexico. From 1949 to 1953, he taught at Lawrence College in Wisconsin and then lived abroad for some years. He now lives in Brooklyn, New York.

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Purdy began to publish stories in magazines in the 1940s. In the 1950s, he tried without success to find an American publisher. His first book was published privately in his own country and then by a major publisher in England, where he had many supporters in the literary world, most notably Dame Edith Sitwell and Angus Wilson.

Purdy has always been isolated from the literary establishment, largely because his works are unusual thematically and stylistically and because he has been a savage social critic. He has concentrated on topics that book reviewers have preferred to ignore.

His first novel, 63:Dream Palace (1956), dealt with obsessive love, homosexuality, and urban alienation, and ended with fratricide. These are typical themes in Purdy's works, which often describe obsessive love between men. Purdy writes about men who are unable to express their love for other men because homosexuality is unthinkable to them. The result of this failure can be horrifying violence, as in Eustace Chisholm and the Works (1967) and Narrow Rooms (1978).

The love need not be sexual, as In a Shallow Grave (1975) shows. Purdy's protagonists are usually people who have not found love in their families and who can find no home in the cities in which they live. The happiness of love is temporary and is usually the means by which the protagonist is led to his fate. In some of Purdy's recent work, AIDS has been one of the many kinds of fate awaiting those who search for love.

In addition to novels of urban alienation, Purdy has written novels such as The Nephew (1960), which deals with small-town life in the Midwest. His later books of this kind, like Jeremy's Version (1970) or In the Hollow of his Hand (1986), are increasingly Gothic, in the tradition of Sherwood Anderson and Carson McCullers. His rural characters, like his urban ones and like the protagonists of Greek drama, are pursued by a malevolent destiny.

Purdy's gloom and pessimism are tempered to some extent by his humor, especially in black comedies like Cabot Wright Begins (1964). Out With the Stars (1992), presents his usual themes in a high camp manner reminiscent of Ronald Firbank.

Purdy's style is one of his most distinctive qualities. Like Mark Twain and Sinclair Lewis, Purdy attempts to reproduce everyday American speech both in his dialogue and in his narration. The flatness and simplicity of this style form an effective background for his stories of obsession. At times, as in In a Shallow Grave and many of his short stories, this simplicity takes on a biblical grandeur that is the perfect vehicle to present his characters, who are simultaneously exalted and tormented by larger-than-life emotions.

Although Purdy has published excellent novels, short stories, poems, and plays for almost forty years, he has never achieved the popular fame or the critical attention he deserves. He has, however, always been highly regarded by other writers and has had a great influence on such younger gay writers as Dennis Cooper and Paul Russell.

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