Waksman, who was born at Priluki in Russia, emigrated to America in 1910; he graduated from Rutgers University in 1915 and obtained his American citizenship the following year. He studied for his doctorate at California University, receiving his PhD in 1918, and then returned to Rutgers, where he became professor of soil microbiology in 1930.

A new area in the science of soil microbiology was opened up with the discovery by René Dubos, in 1939, of a bacteria-killing agent in a soil microorganism. This stimulated renewed interest in Fleming's penicillin and, with the value of penicillin at last established, Waksman began a systematic search for antibiotics among microorganisms. In 1943 he isolated streptomycin from the mold Streptomyces griseus and found that it was effective in treating tuberculosis, caused by Gram-negative bacteria. This was a breakthrough as previously discovered antibiotics had proved useful only against Gram-positive bacteria. This work gained Waksman the 1953 Nobel Prize for physiology or medicine; he donated the prize money to a research foundation at Rutgers.

Waksman isolated and developed many other antibiotics, including neomycin. From 1940 until his retirement in 1958 he was professor of microbiology and chairman of the department at Rutgers; from 1949 he also held the post of director of the Rutgers Institute of Microbiology.