After schooling in Europe, Terhune graduated from Columbia University in 1893, traveled in Egypt and Syria, and joined the staff of the New York Evening World in 1894. His first book was Syria from the Saddle (1896); his first novel, Dr. Dale (1900), was written in collaboration with his mother, herself a novelist. He published more than 12 books before he left the Evening World in 1916.

In 1919 appeared the first of his popular dog stories, Lad, a Dog, written at his farm near Pompton Lakes, where for the rest of his life he wrote, bred prize collies, fished, and hunted. He wrote more than 25 books after 1919, nearly all of them novels in which dogs played conspicuous parts, including Bruce (1920), The Heart of a Dog (1924), Lad of Sunnybank (1928), and A Book of Famous Dogs (1937).