In the early 1970s David Karoly enrolled in applied mathematics at Monash University, Melbourne, but later became interested in meteorology. In 1980 he was awarded a doctorate in meteorology from the University of Reading in Reading, England.
After returning to Australia, from 1995 to 2000 Karoly became Director of the Cooperative Research Centre for Southern Hemisphere Meteorology at Monash University. Between 2003 and 2007 he was Professor of Meteorology in the School of Meteorology at the University of Oklahoma (OU). Since May 2007 he joined the School of Earth Sciences at the University of Melbourne.
Karoly has served as a lead author for the Intergovernmental Panel on Climate Change (IPCC) Working Group 2 (on societal impacts) and he is a member of the faculty of the School of Earth Sciences at the University of Melbourne. His work, along with that of the many other lead authors and review editors, contributed to the award of the 2007 Nobel Peace Prize, which was won jointly by the IPCC and Al Gore. He is member of the board of the Climate Change Authority.