Raucher was born in Brooklyn, New York. His father was a World War I veteran whom Raucher recalled as having a bayonet wound across his forehead. The family's financial situation fluctuated according to the success of the elder Raucher's career. During more profitable years, the family vacationed on Nantucket. During one such trip, when he was fourteen, Raucher developed a friendship with an older woman he identified as "Dorothy," a war bride whose husband was fighting in Europe, an event which formed the basis for Summer of '42. During this time, Raucher's best friend was a boy named Oscar "Oscy" Seltzer, who would later go on to become a United States Army medic who died during the Korean War while tending to a wounded soldier.
After graduating high school, Raucher attended NYU, where he studied advertising and worked as a cartoonist for $38 a week, drawing comic strips. After graduating he became an office boy at 20th Century Fox and eventually worked his way into advertising; Raucher was known for his hobby of writing plays, which several ad executives believed to be the mark of a creative genius. Raucher proved successful as an ad man, and was part of the advertising team that developed the ad campaign for the opening of Disneyland.
While working as an ad executive, Raucher simultaneously pursued a writing career, and several of his plays were successfully staged on Broadway, including Harold, one of the earliest plays to feature Anthony Perkins. Raucher also wrote for television, with short plays being featured as segments on a number of variety shows. A film agent saw a preliminary draft of the script for Raucher's play Sweet November and helped Raucher negotiate a sale of the script to Warner Brothers. While working on November, Raucher befriended Anthony Newley, with whom he shared a lifelong friendship; Newley would later become the godfather to Raucher's youngest daughter. Following the success of November, Raucher helped Newley cowrite Can Heironymus Merkin Ever Forget Mercy Humppe and Find True Happiness?, which went on to become a cult film.
Inspired by several of his friends who expressed liberal sentiments while retaining racist ideologies, Raucher wrote the script for Watermelon Man. He successfully sold the script and partnered with Melvin van Peebles on making the film, though he was displeased with van Peebles' desire to alter his script in order to make the picture a black power movie. Due to the two's tense relationship, Raucher novelized his original script, both to retain his original message and to prevent van Peebles from publishing his own version of the story. Peebles' idea to turn Watermelon Man into the first black power picture would later find life as Sweet Sweetback's Badass Song.
For much of his early career, Raucher had attempted to sell a screenplay based on his experiences with Dorothy and Oscar Seltzer; after seven years he successfully sold the script to Robert Mulligan, who was looking to recreate the success of To Kill a Mockingbird. Although the script had originally begun life as a tribute to Seltzer, Raucher instead found himself focusing more on Dorothy. Warner Bros., fearful that the movie would be a box office bomb, not only agreed to give Raucher a large share of the royalties in lieu of payment but also paid him to write a novelization of his script in an effort to drum up interest in the movie. Using the opportunity, Raucher focused the novel more on his relationship with Seltzer and less on Dorothy. Against expectation, the book became a national bestseller and helped drive the movie to become one of the highest grossing films of the 1970s. Raucher continued to write prolifically throughout the 1970s, ultimately publishing six novels and penning six screenplays throughout the decade. He effectively retired in the 1980s, when a number of planned film projects failed to materalize, notably a film adaptation of his bestselling novel There Should have been Castles, a period piece about 1950s artists partially inspired by his early career, which studio executives said was too lewd to successfully market. Despite this, Summer of '42 has continued to be a cultural phenomenon, with a Broadway show based on the film being produced in 2001. A planned film of Raucher's sole horror novel, Maynard's House, was trapped in development hell for much of the 1990s and 2000s, with the rights last belonging to Studio Canal, who planned to produce it under the title Ara/Froom.
In 1960, Raucher married Broadway dancer Mary Katherine Martinet, with whom he had two daughters. The two remained married until her death from cancer in 2002.
Raucher is often credited as a ghostwriter for the film The Great Santini. However, Raucher did no work on the film; the misconception arises from the fact that, in the 1980s, Raucher was hired to write the pilot for a failed television adaptation of the film. Nonetheless, Raucher says that, into the 2000s, he continued to get fan mail for Santini, with the volume of letters he received second only to those for Summer of '42.
Journalist and novelist Preston Fassel cites Raucher's work, particularly A Glimpse of Tiger, as an influence on his own writing. Fassel credits a brief correspondence with Raucher in college, during which Raucher encouraged him to become a writer, as inspiring him to pursue fiction writing. Fassel would later go on to write a biography of Raucher for the website Cinedump.com.