Collins was born in Christopher, Illinois. He grew up in Benton, Illinois, where his next door neighbour was future film star John Malkovich. Collins enjoyed a successful high school basketball career at Benton High School, under renowned coach Rich Herrin, after which he went on to play for Illinois State University in Normal, Illinois, coached from 1970 by Will Robinson, the first black head coach in NCAA Division I basketball.
Collins was chosen to represent the United States at the 1972 Summer Olympics in Munich, West Germany. While those games are mainly remembered for the terrorist attack that left eleven Israeli athletes dead, there was also the controversial gold medal basketball game between the United States and the Soviet Union, in which Collins played a key part. The United States was undefeated in Olympic basketball competition history, and widely expected to remain undefeated after these Olympics. After Collins hit two free throws near the end of the final game, the United States had a 50–49 lead. However, confusion over a timeout call and subsequent issues with the game clock led the game's officials to restart the game's final three seconds two times. On their final attempt, the Soviets made a layup to take a lead. This gave the U.S. its first ever Olympic loss by a 51–50 margin. Collins and his teammates refused to accept the silver medals after the game in protest of the officiating and outcome of the game.
After that controversial game, Collins went on to be drafted first overall by the Philadelphia 76ers. He played eight seasons for Philadelphia, and was an all star three times. In 1976–77, he joined Julius Erving leading the Sixers to the NBA Finals, where they lost to the Portland Trail Blazers.
A rash of injuries to his feet and left knee beginning in 1979, would end Collins' career in 1981. In all, he played 415 NBA games, scoring 7427 points (17.9 per game).
After his retirement, Collins turned to coaching. He joined Bob Weinhauer's staff at the University of Pennsylvania as an assistant coach and later followed Weinhauer to Arizona State for the same job.
In May 1986, Collins was named head coach of the Chicago Bulls; the team featured a young Michael Jordan who was entering his third season. Despite having Jordan, the Bulls were coming off a 30-52 season and fired their past two coaches after one season each.
Collins immediately helped the Bulls turn around their fortunes, showing an improvement of 10 games in each of his first two seasons, coaching Chicago to a 50-32 record in his second year. In his third year as coach, he brought Chicago to their first Eastern Conference Finals Appearance in 15 years, however, they were unable to get past their Central Division rival the "Bad Boys" Detroit Pistons. Despite the Bulls' success and his popularity in Chicago, Collins was fired in the summer of 1989.
Collins was named the head coach of the Detroit Pistons in 1995. His arrival in Detroit was similar to his in Chicago, as the Pistons had a second-year star who drew comparisons to Michael Jordan, Grant Hill. In his first season, he was able to improve the team's previous season's record by 18 games and lead them back to the playoffs, though they would be swept by the eventual Eastern Conference Champion Orlando Magic.
A fast start in his second season pushed Hill to the top of MVP consideration and Collins was named the Eastern Conference All-Star team's coach. The highlight of the year for Collins came on April 13, when the Pistons defeated the defending champion Bulls to end Detroit's 19-game losing streak against Chicago. (Ironically Collins ended a Chicago losing streak against the Pistons in the 80's.) The Pistons finished 54-28 and lost in the first round of playoffs to the Atlanta Hawks, 3–2 in the best-of-five series.
He served as Pistons' head coach until February 2, 1998, when he was fired and replaced by Alvin Gentry. Collins then became a television broadcaster, working for many years at various networks, such as NBC on the NBA on NBC and TNT on the NBA on TNT.
He worked as a broadcaster for about five years, before being hired to coach the Washington Wizards, before the start of the 2001–02 NBA season. In Washington, Collins was reunited with Michael Jordan and Charles Oakley. Once again, in his first season with his new team, Collins improved the team's previous season's record by 18 games. Though his .451 winning percentage through 2 seasons was better than the Wizards' .308 record the previous 2 seasons (and subsequent .305 record the following season), Collins was fired at the conclusion of the 2002–03 season.
After being fired by the Wizards, Collins returned to announcing games for TNT. In addition, he served as an analyst for NBC Sports' TV coverage of basketball at the 2008 Summer Olympics in Beijing. He also was a basketball analyst for NBC during the 2012 Summer Olympics in London.
During this time, Collins's name surfaced several times regarding head coaching vacancies. In 2005, he was a candidate for the Milwaukee Bucks job but was passed over for Terry Stotts. Collins was approached by the team again in 2008 to serve as their GM and coach but turned them down again. In May 2008, Collins was in negotiations to coach the Chicago Bulls, nearly 20 years after he was fired from the team. However, Collins withdrew his name when he and owner Jerry Reinsdorf "agreed it wasn't the best to keep going this way," in light of their close personal friendship.
On May 21, 2010, Collins was hired as head coach of the Philadelphia 76ers. While the 76ers initially started out poorly with a record of 3-13, the team showed great improvement as the season went on, and clinched the seventh seed in the Eastern Conference for the playoffs. Under Collins, the team increased its win total by 14 games over the previous season. They lost to the eventual Eastern Conference champion Miami Heat in the first round, but were able to avoid a sweep that had been predicted. Collins finished second in Coach of the Year voting that season.
In the lockout-shortened 2011–2012 season, Collins led the Sixers to an improved record, but Philadelphia was only able to take the eighth seed in the playoffs. Against the top seeded Chicago Bulls, Collins led the Sixers to their first playoff series victory since 2003. It was the fifth time in NBA history that an eighth seed defeated a first seed in a playoff series. They took the next series against the Boston Celtics to seven games, but lost.
Collins resigned as 76ers coach on April 18, 2013, citing a need to spend more time with his five grandchildren. It was announced that he would stay with the team as an adviser.
After leaving the 76ers, Collins returned to broadcasting the NBA with ESPN.
On September 20, 2017, Collins agreed to return to the Chicago Bulls as a senior advisor.
Doug and his wife Kathy have two children. They reside in the Delaware Valley. Their son Chris, a former Duke University basketball player, is the head basketball coach at Northwestern University and their daughter Kelly, who played basketball at Lehigh University, is a school teacher in Pennsylvania.
Illinois State University's basketball court is named after Collins (Doug Collins Court at Redbird Arena). A statue depicting Collins and his ISU coach, Will Robinson, was unveiled on September 19, 2009, outside the north entrance of Redbird Arena.