Chamberlin came from a farming background in Mattoon, Illinois. His discovery of fossils in a local limestone quarry aroused his interest in geology, which he pursued at the University of Michigan. He worked for the Wisconsin Geological Survey from 1873, serving as chief geologist for the period 1876–82. From 1881 until 1904 he was in charge of the glacial division of the US Geological Survey. After a period as president of the University of Wisconsin (1887–92) he became professor of geology at the University of Chicago (1892–1918).

Apart from his work on the geological surveys, Chamberlin's most significant work was in the field of glaciation. Early work on glaciation had assumed that there had been one great ice age but James Geikie, in his The Great Ice Age (1874–84), had begun collecting evidence that there had been several ice ages separated by nonglacial epochs. Chamberlin contributed the chapter on North America to Geikie's work. He showed that drift deposits are composed of at least three layers and went on to establish four major ice ages, which were named the Nebraskan, Kansan, Illinoian, and Wisconsin after the states in which they were most easily studied.

Together with the astronomer Forest Moulton, Chamberlin formulated, in 1906, the planetismal hypothesis on the origin of the planets in the solar system. They supposed that a star had passed close to the Sun causing matter to be pulled out of both. Within the gravitational field of the Sun this gaseous matter would condense into small planetesimals, and eventually into planets. The theory was published in The Two Solar Families (1928) but it has little support today as it cannot account for the distribution of angular momentum in the solar system.