Hoban was born in Lansdale, just outside of Philadelphia, Pennsylvania, the son of two Jewish Ukrainian immigrants. He was named after Russell Conwell.
After briefly attending Temple University, he enlisted in the Army at age 18 and served in the Philippines and Italy as a radio operator during World War II. During his military service, he married his first wife, Lillian Hoban (née Aberman), who later illustrated many of his books.
Hoban then worked as an illustrator (painting several covers for TIME, Sports Illustrated, and The Saturday Evening Post) and an advertising copywriter—occupations which several of his characters later shared—before writing and illustrating his first children's book, What Does It Do and How Does It Work.
"About the Artist" in the Macmillan Classics Edition of Tales and Poems of Edgar Allan Poe (second printing 1965), which Hoban illustrated, notes that he worked in advertising for Batten Barton Durstine & Osborn and that later he became the art director of J. Walter Thompson: "Heavy machinery later became subjects for his paintings, and this led him into the children's book field with the writing and illustrating of What Does It Do and How Does It Work? and The Atomic Submarine." That section on the artist points out also that at the time the book's illustrations were copyrighted, in 1964, Hoban was teaching drawing at the School of Visual Arts, in New York, collaborating with his first wife on their fifth children's book, and living in Connecticut.
He wrote exclusively for children for the next decade, and was best known for his series of short books starring Frances, a temperamental badger child, whose escapades were in part based on the experiences of his four children, Phoebe, Brom, Esmé, Julia, and their friends. The Mouse and His Child, a dark philosophical tale for older children, appeared in 1967 and was Hoban's first full-length novel.
In 1969, Hoban, his wife, and their children travelled to London, intending to stay only a short time. The marriage dissolved, and while the rest of the family returned to the United States, Hoban remained in London and has resided there ever since. All of his adult novels except Riddley Walker, Pilgermann and Fremder are set in whole or part in contemporary London.
In 1971, Hoban wrote a book employing concepts borrowed from "The Gift of the Magi" called Emmet Otter's Jugband Christmas, which further reached fans through a 1977 special originally created for HBO by the Jim Henson Company. The book was illustrated by his then-wife, Lillian Hoban, whose drawn renditions of these characters were faithfully replicated by the Muppet creators. The story tells of a poor mother and son who do what they must to try to provide a special Christmas to one another, taking a route neither of them expected.
The 1985 film Turtle Diary was adapted by Harold Pinter from Hoban's novel Turtle Diary .
Hoban now lives with his second wife, Gundula Ahl; they have three children, one of whom is the composer Wieland Hoban, to whom Riddley Walker is dedicated. Wieland has set one of his father's texts in his piece Night Roads (1998-99).