He became the companion of a series of wealthy male and female patrons. His friends, who called him Denny, included Christopher Isherwood, Brion Gysin, Glenway Wescott, Truman Capote, George Platt Lynes, Jane and Paul Bowles, Jean and Cyril Connolly and Michael Wishart. Something of a mythic figure, Isherwood called him "the most expensive male prostitute in the world" and Capote considered him the "Best-Kept Boy in the World". Fouts was an opium addict, and at one time boyfriend of artist Peter Watson.
In 1938, Fouts introduced Brion Gysin to Jane and Paul Bowles, later shocking them by "shooting flaming arrows from his hotel window onto the busy Champs Élysées below", having spent some time in Tibet, learning archery. Fouts' occasionally outrageous behavior made some uncomfortable. Michael Shelden remarked that Fouts' "'Deep South' charm masked a volatile, sometimes nasty temper. There were rumours about his past and tales of erratic, dangerous behavior.
During World War II, Watson sent Fouts to the US for his safety. He met Christopher Isherwood in Hollywood in August 1940. Isherwood's guru, Swami Prabhavananda, refused to accept Fouts as a disciple despite his interest in Vedanta. Isherwood, nonetheless, had Fouts move in with him in the summer of 1941 to "lead a life of meditation". This period is described in Isherwood's Down There on a Visit, where Fouts is represented as the character Paul. Some time into the war, Fouts, who was a conscientious objector, was drafted for the Civilian Public Service Camp. He later completed his high school diploma, studied medicine at UCLA and then settled in Europe. While in Paris, he sent a blank check to Truman Capote with only the word "come" written on it, after becoming enamored of the Harold Halma photograph of Capote on the original back dust jacket of Other Voices, Other Rooms. Capote rejected the check, but accepted his offer to visit, and would spend hours with the Fouts in his dark apartment on the Rue de Bac, talking and listening to Fouts' stories.
Fouts was the lover of numerous notable figures, including Prince Paul I of Greece (later King) and allegedly French actor Jean Marais. Capote, in exaggeration of his prowess, claimed that "had Denham Fouts yielded to Hitler's advances there would have been no World War Two.
Fouts spent much of his later life dissolute, spending time "in bed like a corpse, sheet to his chin, a cigarette between his lips turning to ash. His lover would remove the cigarette just before it burned his lips." Fouts died in 1949 in Rome at the age of 35 of a heart attack, and his body was buried in Protestant Cemetery. It is said that he died on the toilet, and his death year has also been reported as 1948.