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Steinhauer was born in Baltimore, Maryland, USA, and grew up in Virginia. He attended university at Lock Haven, Pennsylvania and The University of Texas, Austin. He received an MFA in Creative Writing at Emerson College in Boston.
After graduation, Steinhauer received a yearlong Fulbright grant to write a novel in Romania, about their 1989 revolution. It was called Tzara's Monocle, and when he moved to New York City afterward, he used that manuscript to secure a literary agent. However, it was with another book, the historical mystery set in Eastern Europe, The Bridge of Sighs, that Steinhauer first found publication.
His 2009 CIA novel, The Tourist, received positive reviews and is being developed for film by Sony Pictures Entertainment for Doug Liman to direct. A 2010 follow-up, The Nearest Exit was also positively reviewed.
Since 2003, he has lived in Budapest, Hungary. During the winter of 2009/10, Steinhauer was the Picador Guest Professor for Literature at the University of Leipzig's Institute for American Studies in Leipzig, Germany.
The Bridge of Sighs was the first in a five-book series of thrillers chronicling the evolution of a fictional Eastern European country situated in the historical location of Ruthenia (now part of the Ukraine) during the Cold War, with one book for each decade. Each book also focuses on a different main character.