He started in the diplomatic service in 1894 but was placed on leave in unclear circumstances (probably relating to sexual scandal). In 1897 he bought a villa in Naples. The next year he married Elizabeth Louisa Theobaldina FitzGibbon, a cousin (their mothers were sisters, daughters of Baron Ernst von Poellnitz). They had two children, but divorced in 1903 on grounds of Elizabeth's infidelity. Norman's first book publication, (Unprofessional Tales (1901)) was written under the pseudonym Normyx, in collaboration with Elizabeth.
He moved to Capri, spending time there and in London, and became a more committed writer. Nepenthe, the fictional island setting of South Wind, is Capri in light disguise. In 1912-1914 he worked for The English Review. He met D. H. Lawrence through this connection. This led to a feud, after Lawrence in 1922 in Aaron's Rod based a character on Douglas. In late 1916 he jumped bail in London on a charge of indecent assault on a sixteen year old boy, and effectively then lived in exile. He himself wrote of this in self-exculpation: 'Norman Douglas of Capri, and of Naples and Florence, was formerly of England, which he fled during the war to avoid persecution for kissing a boy and giving him some cakes and a shilling'. (The boy in fact complained to the police).
During Douglas's years in Florence, he was associated with the publisher and bookseller Pino Orioli, who published in Italy in his 'Lungarno' series a number of Douglas's books and also works by other English authors, many of which (such as the first edition of Lawrence's Lady Chatterley's Lover), would have been prosecuted for obscenity if published in London. Douglas probably had a major hand in writing Orioli's autobiography, Memoirs of a Bookseller.
Further scandals led to Douglas leaving Italy for the south of France in 1937. During World War II Douglas left France, and on a circuitous journey to London, where he lived from 1942 to 1946, he published the first edition of his 'Almanac' in a tiny edition in Lisbon. He returned to Capri, where his circle of acquaintances included the writer Graham Greene and the cookery expert Elizabeth David. He died in Capri, apparently deliberately overdosing himself on drugs after a long illness. (see Impossible Woman: Memoirs of Dottoressa Moore, ed. by Greene).