Schawlow was born in Mount Vernon, New York. His mother, Helen (Mason), was from Canada, and his father, Arthur Schawlow, was a Jewish immigrant from Riga (then in the Russian Empire, now in Latvia). Schawlow was raised in his mother's Protestant religion. When Arthur was three years old, they moved to Toronto, Ontario, Canada.
At the age of 16, he completed high school at Vaughan Road Academy (then Vaughan Collegiate Institute), and received a scholarship in science at the University of Toronto (Victoria College). After earning his undergraduate degree, Schawlow continued in graduate school at the University of Toronto which was interrupted due to World War II. At the end of the war, he began work on his Ph.D at the university with Professor Malcolm Crawford. He then took a postdoctoral position with Charles H. Townes at the physics department of Columbia University in the fall of 1949.
He went on to accept a position at Bell Labs in late 1951. He left in 1961 to join the faculty at Stanford University as a professor. He remained at Stanford until he retired to emeritus status in 1996.
Although his research focused on optics, in particular, lasers and their use in spectroscopy, he also pursued investigations in the areas of superconductivity and nuclear resonance. Schawlow shared the 1981 Nobel Prize in Physics with Nicolaas Bloembergen and Kai Siegbahn for their contributions to the development of laser spectroscopy.
Schawlow coauthored the widely used text Microwave Spectroscopy (1955) with Charles Townes. Schawlow and Townes were the first to publish the theory of laser design and operation in their seminal 1958 paper on "optical masers", although Gordon Gould is often credited with the "invention" of the laser, due to his unpublished work that predated Schawlow and Townes by a few months. The first working laser was made in 1960 by Theodore Maiman.
In 1991, the NEC Corporation and the American Physical Society established a prize: the Arthur L. Schawlow Prize in Laser Science. The prize is awarded annually to "candidates who have made outstanding contributions to basic research using lasers."