Born the son of an army surgeon in Darmstadt, Duesterberg entered the Prussian Army in 1893 after training in the cadet corps. In 1900, Duesterberg was part of the East Asian Expedition Corps that saw action in China during the Boxer Rebellion. Two years later, Duesterberg became an officer and held a variety of army commands prior to World War I. During the war, Duesterberg served in the Prussian War Ministry and eventually attained the rank of lieutenant colonel. Following the war, Duesterberg resigned from the army in protest over the Versailles Treaty, which Duesterberg viewed as being extremely unfair to Germany. Duesterberg subsequently decided to enter politics and joined the German National People's Party (DNVP) in 1919.
After various disagreements with the party leadership, however, Duesterberg left the DNVP in 1923 and joined the nationalistic and pro-monarchy Stahlhelm, Bund der Frontsoldaten, which largely consisted of ex-servicemen disgruntled with the Weimar Republic. Duesterberg quickly moved through its hierarchy and by 1924 was one of two of its federal leaders (the other being Franz Seldte). Together with General Georg Ludwig Rudolf Maercker, Duesterberg was one of the leaders of the extreme anti-Semitic fraction within the Stahlhelm who wanted to ban Jews from joining, and expel all of the current Jewish members. In March 1924, Maercker and Duesterberg forced Seldte to adopt the "Aryan clause" and expel all Jews from the Stahlhelm. The "Aryan clause" of 1924 was later to serve as the inspiration for similar "Aryan clauses" under the Third Reich, and in particular influenced the War Minister, General Werner von Blomberg in his attempts to keep the Wehrmacht "racially clean". Under Duesterberg's leadership, the Stahlhelm became Germany's largest para-military groups.
In the late 1920s, Duesterberg allied the Stahlhelm with the Nazi Party and other right wing groups. In 1929 Duesterberg campaigned against the Young Plan in the referendum held in November 1929. In 1931, Duesterberg played a key role in forcing the referendum on early elections in Prussia, believing this would help polarize German politics by incorporating the moderate right into the "national" camp. The leader of the German National People's Party Alfred Hugenberg had starting in 1929 embarked upon a strategy of polarization aimed at the destruction of the political center in Germany, so that the only alternatives would the Marxist parties in the form of the SPD and KPD and the right-wing "national" parties. The failure of the Prussian referendum helped to win Duesterberg away from his strategy of attempting to co-opt the moderate right into the "national" camp, and instead to work for the destruction of the moderate right as Hugenberg advocated. In October 1931, Duesterberg allied the Stahlhelm with the Nazis, DNVP, and other right wing groups in order to form the Harzburger Front. The Harzburger Front attempted to bring about the downfall of Heinrich Brüning and the Weimar Republic, but it eventually dissolved due to Adolf Hitler's unwillingness to subordinate the Nazi Party to such a vast right wing coalition on a long term basis. After the dissolution of the Harzburger Front, Duesterberg continued to lead the Stahlhelm and maintained the organization's alliance with the DNVP.
In 1932, Duesterberg was nominated by the Stahlhelm and DNVP to run for President of Germany, but the Nazis ultimately destroyed any chance Duesterberg had of gaining mass support from the German people when they revealed he had Jewish ancestry. In April 1932, the deeply anti-Semitic Duesterberg learned for the first time that his grandfather was a Prussian Jewish doctor who converted to Lutheranism in 1818, a revelation that caused Duesterberg to suffer a nervous breakdown and to submit his resignation in shame from the Stahlhelm. Several of Duesterberg's friends persuaded him not to resign, and in an attempt to stay on as Stahlhelm vice-president, Duesterberg suggested new requirements for every Stahlhelm member, namely that:
The revelation of Duesterberg's Jewish ancestry caused Duesterberg to poll poorly in the first ballot of the election, and he withdrew from the runoff election that followed.
During the 1932 presidential elections, the Nazis went out of their way to taunt Duesterberg for having Jewish ancestry with Joseph Goebbels and Richard Walther Darré being especially vicious in their attacks. Duesterberg was so hurt by Darré's attacks that he challenged him to a duel, a challenge that Darré rejected because it was beneath him to fight a man with "Jewish blood". Duesterberg then took up his dispute with Darré before the court of honor of the Former Officers of the 1st Hanoverian Field Artillery Regiment of Scharnhorst, number 10 to which Darré belonged. Duesterberg argued before the court of honor that Darré should be expelled for engaging in behavior that was unbecoming of a German officer while Darré argued that he had right and duty to subject Duesterberg to anti-Semitic insults. The court of honor ruled in Darré's favor, stating that he was right to insult Duesterberg for having "Jewish blood".
Ironically, Duesterberg was offered a position in Hitler's cabinet when Hitler became Chancellor of Germany in 1933, but Duesterberg flatly refused the proposal. Franz Seldte, however, did enter Hitler's cabinet, which undermined the Stahlhelm and Duesterberg's authority over the organization, and thus he resigned his leadership position in 1933. In April 1933, Duesterberg was strongly urged to resign from the Stahlhelm by President Paul von Hindenburg and the Defense Minister, General Werner von Blomberg who told him that he was now a liability to them with Hitler now chancellor.
In 1934, Duesterberg was arrested by the Nazis during the Night of the Long Knives and sent to Dachau concentration camp, where he was briefly interned. After being released, Duesterberg drifted into obscurity. He was known to have had limited contacts with the anti-Nazi Carl Friedrich Goerdeler in 1943, but Duesterberg ultimately did not play any role in Goerdeler's plots against Hitler. In 1949, Duesterberg wrote The Steel Helmet and Hitler, in which he defended his pre-war political career and the Stahlhelm and detailed the movement's independence from the Nazi Party and "the insane Jew hatred preached by Hitler". A year later, Duesterberg died in Hamelin.