In 1906, Steinberg entered Moscow University, where he studied law. He joined the Socialist Revolutionary Party (also known as SR or Eser) and was exiled for his activism. He then moved to Germany and completed his education at the University of Heidelberg.
Returning to Moscow, he embarked on a legal career. He served briefly as minister of justice in Lenin’s first government (1917-1918), and it was rumored at the time that no cabinet meetings took place on Saturdays in deference to Commissar Steinberg’s religious practices.
By 1923, however, Lenin had disposed of his non-communist allies, and Steinberg had taken refuge in Berlin. There, for the next ten years, he was the leading Social Revolutionary spokesman, championing the cause of parliamentary freedom, contributing to the left-wing press in many countries, and publishing works such as The Moral Aspect of the Revolution (1925) and Memoirs of a People's Commissar (1929), which appeared in Russian, Yiddish, and German. Hitler’s rise to power drove Steinberg to London in 1933, and from there he emigrated to New York a decade later.
After the Nazis came to power in 1933, Steinberg, his wife and three children settled in London. There, he was one of the co-founders of the Freeland League, which attempted to find a safe haven for European Jews fleeing the Holocaust.
While the Nazi menace turned many Jews into Zionists, it made Steinberg a wholehearted advocate of Jewish territorialism, that is, the search for a territory other than the Land of Israel where Jews could have an autonomous existence. When Britain’s policy had virtually closed the gates of Palestine to Jewish refugees, he sought at least a temporary haven for them elsewhere, and his establishment of the Freeland League was the first step toward creating an autonomous Jewish republic far from the danger zone. The territorialist program, however, never gained international support. Steinberg advocated an autonomous Jewish settlement in Australia, but this proposition was rejected by the Australian government and his book, Australia — The Unpromised Land, records his bitter disappointment.
Throughout his life, due to the influence of an enlightened but religiously traditionalist upbringing, Steinberg remained an observant Orthodox Jew.
Steinberg's political views were essentially anarchist, although he defined himself as a Left Eser or Left Narodnik. Russian Left Esers proposed a radically decentralized federation of worker syndicates, councils and cooperatives whose delegates are chosen by direct democracy and could be revoked at any moment.
Unlike many anarchists, Steinberg believed that it is possible and necessary to form a political party whose task would be the destruction of the state from within. He also noted, like some contemporary anarchists, that even an established syndicalist federation would not be completely free of elements or "crystals" of organized power. According to Steinberg, even a relatively free and stateless social system has to acknowledge the existence of some reminiscent government-like structures within itself, in order to decentralize or dismantle them and further "anarchize" the society. Steinberg viewed anarchism as an underlying principle, spirit, and drive of revolutionary socialism, rather than as a concrete political program with an ultimate goal. Therefore, he refrained from equating his syndicalist ideas with "anarchism", because such an equation, in his view, would have compromised the very subtle and perpetual nature of anarchist principles.
Steinberg was a leader of the Jewish Territorialist movement. He worked hard to establish a Jewish self-managed territory, but did not support the idea of the Jewish nation-state and was highly critical of Zionist movement politics. After the establishment of the State of Israel, he supported the idea of creating a binational federation in Israel/Palestine and, at the same time, continued his efforts to establish a compact self-ruled Jewish settlement somewhere outside the Middle East.
He had a wife and three children.