Fisher was born in San Francisco, California to a Jewish family, the eldest of three sons of Aileen (née Emanuel) and Sydney Fisher, a cabinetmaker. He spent his childhood in the then-middle-class Sea Cliff neighborhood of San Francisco, He graduated from Lowell High School in 1946, and then in 1951, graduated with a B.S. in business administration from the University of California, Berkeley where he was a member of both the Swimming and Water Polo Teams. He is an alumnus of the Theta Zeta chapter of the national fraternity Delta Kappa Epsilon. After school, he served as a U.S. Naval Reserve as an officer and then worked for his father as a cabinet-maker for L. & E. Emanuel Incorporated, a mill and cabinet making firm created by his great-grandfather that his mother inherited after her father died. In the 1960s Fisher started his own business renovating hotels and bought the Capitol Park Hotel in Sacramento fortuitously leasing some retail space to Levi Strauss & Co. which opened a showroom. After unsuccessfully trying to return a pair of Levi's jeans that did not fit, he noticed that most department stores only carried a limited selection of Levi's jeans and suggested to Levi's that they needed a store that would carry all their sizes and styles in one store. The concept was accepted and Fisher and his wife opened their first store named the Gap after the "Generation Gap." The store sold Levi's jeans as well as records and tapes in order to capture the 12-to-25-year-old target market. In 1972, the Fishers launched the Gap label, becoming the first chain in retail history to use its store name as the brand name. The Gap was a resounding success and filed for an IPO in 1973. They went on to purchase Banana Republic, a small, two store mail-order catalogue business; and also founded Old Navy which reached $1 billion in sales in four years. Fisher served as CEO until 1995, Chairman of the Board until 2004, and as company director and Chairman Emeritus until his death.
According to Forbes magazine, his net worth was estimated to be US$3.3 billion. Fisher was a Republican, active in San Francisco politics. He was a founding Board Member of the Presidio Trust (the public corporation that runs the Presidio of San Francisco), a post nominated by the President of the United States. He was married to Doris Feigenbaum, and was a long-time member of Congregation Emanu-El in San Francisco. Their three sons continue to manage the business.
He was a non-executive director of Vodafone from 1999-2000.
Fisher was active in several public education causes, including being a major contributor to KIPP charter schools—a national network of low-income, high-achieving college preparatory public charter schools: he was the chairman of the board of trustees of the KIPP Foundation, the non-profit central organization of the KIPP network. He was also a contributor to Teach For America, GreatSchools.net, and EdVoice, a statewide coalition of California business leaders and others who support education reform. Fisher also served on the California State Board of Education. Fisher and his family donated a generous sum of money to Princeton University in 2006, and the Fisher Hall dormitory at Princeton's new residential college, Whitman College, is named for him. He has also donated to charter schools and museums in San Francisco, including the San Francisco Museum of Modern Art, and paid for public sculptures in San Francisco. In 2007, Fisher was honored as the Alumnus of the Year by the California Alumni Association at the University of California, Berkeley. He also contributed to many Bay Area Jewish causes, including the Jewish Community Center of San Francisco and the S.F.-based Jewish Community Federation and Endowment Fund.
Since founding the Gap in 1969, Fisher and his wife Doris began collecting contemporary Western art. In 1993, ARTnews Magazine declared Fisher one of the top ten art collectors in the world. His collection, largely housed at the Gap headquarters in San Francisco, includes comprehensive, career-spanning works by Andy Warhol, Alexander Calder and Roy Lichtenstein, Ellsworth Kelly, Gerhard Richter, Anselm Kiefer, Chuck Close, and Claes Oldenburg and Coosje van Bruggen.
On August 8, 2007, Fisher announced plans to build a 100,000-square-foot (9,300 m2) museum in the San Francisco Presidio, tentatively named the Contemporary Art Museum of the Presidio, to house his art collection. The museum, if it had been built, would have been larger than the San Francisco Museum of Modern Art (SFMOMA). However, the plan engendered widespread skepticism and even outright antagonism among some historic preservationists in San Francisco.
In July 2009, Fisher announced that he and his wife were abandoning their efforts to build the museum at San Francisco's Presidio, stating "Doris and I will take some time to consider the future of our collection and other possible locations for a museum, which could include other sites within the Presidio and elsewhere." In September 2009, Donald and Doris Fisher decided to enter into a partnership with SFMOMA to display the world-famous collection.
One day after the San Francisco Chronicle article on the SFMOMA partnership, the Chronicle reported that Fisher died of cancer at home on Sunday morning, September 27, 2009.