Stossel graduated from Princeton University with a BA in psychology in 1969, and was a member of Princeton Tower Club there. He began his journalism career as a researcher for KGW-TV in Portland, Oregon. His early years include jobs as consumer reporter at WCBS-TV in New York City and as consumer editor at ABC's Good Morning America. Stossel later became an ABCNEWS correspondent, joining the weekly news magazine program 20/20 in 1981. He became its co-anchor in May, 2003.

In 1984, while filming a segment on professional wrestling, Stossel told wrestler David "Dr. D" Schultz on camera that he thought wrestling was fake. Yelling "You think it's fake?", Schultz physically assaulted Stossel, knocking him to the ground. Stossel sued and won a settlement, rumored to be in the neighborhood of $425,000, claiming long-term injury as a result of the assault. Schultz was fired by the World Wrestling Federation (WWF), but he maintains that he was ordered to attack Stossel by representatives of the WWF.

In 20/20's "Give Me a Break" segment, Stossel takes a skeptical look at subjects ranging from government regulations and pop culture to censorship and unfounded fear. "Give Me a Break" was so popular that in 1994, it was spun off into a series of one-hour specials. Topics of these specials include:

   
Stossel's views have often been controversial, and he is one of the few libertarians in mainstream media.

Stossel made an apology to his audience in 2000 after it was discovered that some of the research for a segment he ran discrediting organic foods was misleadingly and incorrectly cited.

Stossel has won many awards, including 19 Emmy Awards. One year, he won so many awards that another winner said in his acceptance speech, "I'd like to thank John Stossel for not having an entry in this category." Stossel has been honored five times for excellence in consumer reporting by the National Press Club. Among his other awards are the George Polk Award for Outstanding Local Reporting and the George Foster Peabody Award.

Stossel has written two books, the first being, Give Me a Break: How I Exposed Hucksters, Cheats, and Scam Artists and Became the Scourge of the Liberal Media (ISBN 0060529148). This autobiography outlines Stossel's career, documenting his philosophical transition toward libertarianism and away from a liberal political stance. It summarizes his opinions concerning the disasters of excessive regulation and government control, and his strong belief in the power of the free market and private enterprise, all presented in his signature down-to-earth style. In its conclusion he calls for a restoration of common sense and personal responsibility by limiting lawsuits, decreasing regulation and shifting social services away from the government and into the private sector. His second book, published by Hyperion in May 2006, is entitled Myths, Lies, and Downright Stupidity: Get Out the Shovel--Why Everything You Know Is Wrong .