Rushdoony was born in New York the son of Armenian immigrants. He was educated at the University of California, Berkeley, where he earned a B.A. in English in 1938, a teaching credential in 1939 and a Master of Arts in Education in 1940. He also attended the Pacific School of Religion. He later received an honorary Doctorate from Valley Christian University for his book, The Philosophy of the Christian Curriculum.
His first book, in 1959, was an analysis of the philosophy of Christian apologist Cornelius Van Til, entitled By What Standard? He also wrote several book reviews that were published in the Westminster Theological Journal, and many other books applying the Van Tillian Presuppositional philosophy to critiquing various aspects of secular humanism.
Rushdoony had an early focus on behalf of homeschooling, which he saw as a way to combat the secular nature of the U.S. public school system, and he vigorously attacked the progressives who had influenced the development of said education system, such as Horace Mann and John Dewey. He also stressed that Christianity had always been present in U.S. history; and while he supported separation of church and state at the national level, he claimed that the First Amendment was designed to protect the already existing "state churches" in each of the coloniesthus, the amendment had not been designed to wholly secularize society.
Perhaps his most renowned and influential work is The Institutes of Biblical Law, with the title modeled after Calvin's Institutes of the Christian Religion. In it he proposed that biblical law should be applied to modern society to wit, that there should be a Christian theocracy; and discussed how to go about doing this. His work has been used by Dominion Theology advocates, who would attempt to implement a Christian theocracy in the USA. He also proposed great freedom in the economic realm of public life, following in this the ideas of Ludwig von Mises and calling himself a Christian libertarian.
Rushdoony was an early board member of the Rutherford Institute, founded in 1982 by John W. Whitehead. His son-in-law, Gary North, is a Christian Reconstructionist writer and economist.