Born in Wilmington, Delaware, Nathans was educated at the University of Delaware and at Washington University, St. Louis, where he obtained his MD in 1954. After first working at the Presbyterian Hospital and Rockefeller University in New York he moved in 1962 to Johns Hopkins as professor of microbiology.

With the identification of the first restriction enzyme, HIND II extracted from the Hemophilus influenzae bacterium by the American biologist Hamilton Smith (1931– ) in 1970, it was clear to many microbiologists that at last a technique was available for the mapping of genes. Nathans immediately began working on the tumor-causing SV40 virus and by 1971 was able to show that it could be cleaved into 11 separate and specific fragments. In the following year he determined the order of such fragments, after which the way was clear for a full mapping. This also helped advance the techniques of DNA recombination.

It was for this work that Nathans shared the 1978 Nobel Prize for physiology or medicine with Smith and Werner Arber.