Oz was educated at the Hebrew University of Jerusalem and at the University of Oxford. He served in the Israeli army (1957–60, 1967, and 1973). After the Six-Day War in 1967, he became active in the Israeli peace movement and with organizations that advocated a two-state solution to the Israeli-Palestinian conflict. In addition to writing, he worked as a part-time schoolteacher and labourer.

Oz's symbolic, poetic novels reflect the splits and strains in Israeli culture. Locked in conflict are the traditions of intellect and the demands of the flesh, reality and fantasy, rural Zionism and the longing for European urbanity, and the values of the founding settlers and the perceptions of their skeptical offspring. Oz felt himself unable to share the optimistic outlook and ideological certainties of Israel's founding generation, and his writings present an ironic view of life in Israel.

His works of fiction include Artsot ha-tan (1965; Where the Jackals Howl, and Other Stories), Mikhaʾel sheli (1968; My Michael), La-gaʿat ba-mayim, la-gaʿat ba-ruaḥ (1973; Touch the Water, Touch the Wind), Kufsah sheḥora (1987; Black Box), and Matsav ha-shelishi (1991; The Third State). Oto ha-yam (1999; The Same Sea) is a novel in verse. The memoir Sipur ʿal ahavah ve-ḥoshekh (2002; A Tale of Love and Darkness) drew wide critical acclaim.

Oz was among the editors of Siaḥ loḥamim (1968; The Seventh Day), a collection of soldiers' reflections on the Six-Day War. His political essays are collected in such volumes as Be-or ha-tekhelet ha-ʿazah (1979; Under This Blazing Light) and Be-ʿetsem yesh kan shete milḥamot (2002; “But These Are Two Different Wars”). How to Cure a Fanatic (2006) is an English-language collection of two essays by Oz and an interview with him.