Bernstein graduated from Montgomery Blair High School in Silver Spring, Maryland. He subsequently attended the University of Maryland, College Park. Bernstein, who is Jewish, is a lifetime member of B'nai B'rith and once was President of B'nai B'rith's Northern Region.
Bernstein met Margaret Jay, daughter of a British Prime Minister and wife of politician Peter Jay, while Peter Jay was serving as UK ambassador to the United States; Bernstein had a much-publicised extramarital relationship in 1979 with Margaret. Bernstein and his second wife, screenwriter Nora Ephron, had an infant son, Jacob, and Ephron was pregnant with her second son, Max, in 1980 when she found out the news of Bernstein's affair with Jay. Ephron delivered Max prematurely after finding out. Writer Ephron was inspired by the events to write the 1983 novel Heartburn, which was made into a 1986 film starring Jack Nicholson and Meryl Streep. In the thinly fictionalized book, Ephron gave unflattering depictions of both Jay and Bernstein, writing of a husband who was “capable of having sex with a venetian blind" and saying that Jay looked like a giraffe with "big feet."
He currently resides in New York with his wife Christine.
Bernstein quit The Washington Post in 1976. He did not see the success that Woodward did post-Watergate; his frequent appearances in gossip columns resulting from the book and movie Ephron released, his arrest, and his dating of Hollywood celebrities did not serve to burnish his journalistic reputation. He was not invited to the 70th birthday gala of Washington Post owner Katherine Graham, which was widely seen as a snub since Bernstein had helped to bring the Post to international stature.
He then worked as the Washington Bureau Chief and as a senior correspondent for ABC News, taught at New York University, and contributed to Time. Bernstein authored two books with Woodward: All the President's Men, which details the successes and failures of their journalistic efforts against the backdrop of the unfolding scandal, and The Final Days, a recounting of the concluding months of the Nixon presidency, although Woodward questioned Bernstein's contributions to the latter book and reportedly wanted to not list him as a co-author. Woodward said, "It was not the most productive time for Carl." Woodward reportedly turned down offers to again work with Bernstein on an investigative column or any further books.
He co-authored the book His Holiness: John Paul II & the History of Our Time with Marco Politi. Following the May 2005 revelation of the identity of Deep Throat, Bernstein contributed to Woodward's book The Secret Man, which deals with Woodward's relationship with Mark Felt. In April 2006, Bernstein published an article in Vanity Fair magazine, where he is a contributing editor, calling for a Senate investigation into the presidency of George W. Bush.
Bernstein wrote a memoir, a "pained, loving, intensely felt account of his parents' ordeal, and his own emotional upheaval, during President Harry Truman's loyalty purges. He has also written a biography of Hillary Rodham Clinton, A Woman In Charge: The Life of Hillary Rodham Clinton, published by Alfred A. Knopf on June 5, 2007.