His father owned a small brewery in Heydekrug, and Sudermann received his early education at the Realschule in Elbing, but, his parents having been reduced in circumstances, he was apprenticed to a chemist at the age of 14. He was, however, able to enter the Realgymnasium (high school) in Tilsit, and to study philosophy and history at Königsberg University.

In order to complete his studies Sudermann went to Berlin, where he was tutor to several families, including the family of the author Hans Hopfen (1835–1904). Next he became a journalist, and was in 1881 and 1882 the co-editor of the Deutsches Reichsblatt. He then devoted himself to fiction, beginning with a collection of naturalistic short stories called Im Zwielicht ("At Twilight", 1886), and the novels Frau Sorge ("Dame Care", 1887), Geschwister ("Siblings", 1888) and Der Katzensteg ("Cats' Bridge", 1890). These works failed to bring the young author as much recognition as his first drama, Die Ehre ("Honour", 1889), which inaugurated a new period in the history of the German stage. This play, originally intended to be a tragedy, but on Blumenthal's advice given a "happy ending," was a pseudo-Nietzschean attack on the morality of the lowly.