Demetirus was born around 185 BC. He was sent to Rome as a hostage at a young age during the reign of his father Seleucus IV Philopator and his mother Laodice IV. Rome taking prominent Seleucid family members hostage was one of the terms of the Treaty of Apamea that had ended the Roman-Seleucid War. His father was murdered by his finance minister Heliodorus in 175 BC; his uncle Antiochus IV Epiphanes killed Heliodorus and took the throne himself. While the throne should have gone to Demetrius, he was both too young and also still held as a hostage in Rome. Antiochus IV died around October-November 164 BC while on campaign in Babylonia and Persia. His 9-year-old son Antiochus V Eupator became king, although real power rested in the regent Antiochus IV had left in Antioch, Lysias. Demetrius was then 22 years old. He requested the Roman Senate to restore the Syrian throne to him, but was rejected, since the Romans preferred a weak Syria and would rather it be ruled by a boy rather than a man. Two years later, Antiochus V was greatly weakened because Rome sent an emissary to sink his ships and hamstring his elephants using the terms of the Treaty of Apamea as cause. Demetrius again petitioned the Senate on the grounds that his captivity would do little to inspire Antiochus V to heed Rome, but the appeal was again unsuccessful, as Rome preferred the perceived weak child over him. With the help of the Greek historian Polybius, Demetrius escaped from confinement and made his way to the Seleucid capital Antioch. There he successfully gained the support of the local aristocracy and was welcomed back on the Syrian throne around November 162 BC. He immediately executed Antiochus V and Lysias.

Demetrius I is recorded in Jewish history (and later Christian history, after the Books of Maccabees were included in some denomination's Biblical canons) for defeating and killing Judas Maccabaeus, the leader of the Maccabean Revolt. Demetrius is recorded as sending a new High Priest to Judea, Alcimus, shortly after his reign started. Alcimus was able to successfully bring back at least some Jews to following the government. Demetrius also dispatched an expedition under Bacchides which broke Maccabee influence over the Judean cities and killed Judas at the Battle of Elasa in 160 BC, restoring Seleucid control to the province for a number of years. Demetrius acquired his surname of Soter, or Savior, from the Babylonians, where he defeated the rebellious Median satrap Timarchus. Timarchus, who had distinguished himself by defending Media against the emergent Parthians, seems to have treated Demetrius' accession as an excuse to declare himself an independent king and extend his realm into Babylonia. His forces were, however, not enough for the legal Seleucid king: Demetrius defeated and killed Timarchus in 160 BC, and dethroned Ariarathes, king of Cappadocia. The Seleucid empire was temporarily united again. Demetrius may have married his sister Laodice V, by whom he had three sons: Demetrius II Nicator, Antiochus VII Sidetes, and Antigonus.

Demetrius' downfall may be attributed to Heracleides, a surviving brother of the defeated rebel Timarchus, who championed the cause of Alexander Balas, a boy who claimed to be a natural son of Antiochus IV Epiphanes. Heracleides convinced the Roman Senate to support the young pretender against Demetrius I. Balas's mercenary army landed and occupied Ptolemais, and started a reign proclaiming himself as king of the Seleucids in Seleucid year 160 (153–152 BC). The Seleucids now had two kings locked in civil war.

While the Jews were a minor part of Demetrius I's empire, their story was unusually well preserved. Jonathan Apphus, the brother of Judas and the new leader of the Maccabees, was able to negotiate a deal with Demetrius I that would allow him to remove some of the Seleucid forces from Judea to use against Balas. However, Jonathan promptly broke his temporary truce with Demetrius after Alexander Balas offered an even better deal to them. Balas allied with Jonathan: he appointed him as High Priest of Judea and strategos, and Jonathan agreed to send Jewish troops to support Balas's cause. Jonathan, who was born of a priestly family but not from Zadok, the high priestly stock, took the title in Tishri, 152 BC. When Demetrius heard of it, he wrote a letter granting more privileges to Jonathan (1 Macc. 10:25-45). Jonathan did not accept the offer, whether from trust in Balas, distrust in Demetrius, belief that Balas was likely to win the civil war, or a combination of all three.

Balas defeated and killed Demetrius I in 150 BC, becoming the sole king of Syria.