Hand was born in Elizabethtown, New York. He received an A.B. from Harvard in 1890, and earned an L.L.B. at Harvard Law School in 1894. He then established a private practice in New York City, which he maintained until 1914, when he was nominated by President Woodrow Wilson to the United States District Court for the Southern District of New York. Hand was confirmed by the Senate and received his commission on September 30, 1914. He served on the District Court until he received a recess appointment from Calvin Coolidge, elevating him to the Second Circuit Court of Appeals. He was confirmed by the Senate on January 18, 1928.
Hand became a senior judge on the Second Circuit on June 30, 1953. His service on the bench ended with his death on October 28, 1954, in Middlebury, Vermont. He was married to Susan Train Hand. He was buried in Elizabethtown.
One of Hand's best-known decisions was rendered in the case of United States v. One Package, 86 F.2d 737 (2d Cir. 1934), in which he ruled that contraceptives, when imported by a licensed physician, were not immoral or obscene devices banned under the Comstock Law provisions incorporated into the Tariff Act of 1930. Hand wrote that "we are satisfied that this statute, as well as all the acts we have referred to, embraced only such articles as Congress would have denounced as immoral if it had understood all the conditions under which they were to be used. Its design, in our opinion, was not to prevent the importation, sale, or carriage by mail of things which might intelligently be employed by conscientious and competent physicians for the purpose of saving life or promoting the well being of their patients."
The same year, Hand further limited the Tariff Act's restrictions in United States v. One Book Entitled Ulysses by James Joyce, 72 F.2d 705 (2nd Cir. 1934), which ruled that the novel Ulysses, by James Joyce, was not obscene and therefore could not be banned from import into the U.S. The opinion was significant in its urging that any test of obscenity could not rely on mere isolated passages but instead had to consider the work as a whole, a test the Supreme Court later endorsed. These principles, filtered through a long line of later cases, ultimately influenced the U.S. Supreme Court's case law on obscenity standards. Hand's opinion also displayed a historical perspective of the harm of overzealous censorship:
Art certainly cannot advance under compulsion to traditional forms, and nothing in such a field is more stifling to progress than limitation of the right to experiment with a new technique. The foolish judgments of Lord Eldon about one hundred years ago, proscribing the works of Byron and Southey, and the finding by the jury under a charge by Lord Denman that the publication of Shelley's "Queen Mab" was an indictable offense are a warning to all who have to determine the limits of the field within which authors may exercise themselves. We think that Ulysses is a book of originality and sincerity of treatment and that it has not the effect of promoting lust. Accordingly it does not fall within the statute, even though it justly may offend many.
Hand's cousin, Judge Learned Hand, joined in Augustus Hand's opinion; Chief Judge Martin Manton dissented.
In 1946, Hand was temporarily assigned to a three-judge panel of the New York Southern District Court for the U.S. government's antitrust case against the eight largest movie distributors. The court's per curiam decree in United States v. Paramount Pictures, 70 F.Supp. 53 (S.D.N.Y. 1946), significantly altered the motion picture industry in the United States, by forbidding the distributors from colluding with movie theaters in such anti-competitive licensing practices as price-fixing.