He grew up with his grandmother in the Bavarian Forest. When he graduated from high school in Cham in 1960, he was adopted by his biological father, to whom his mother, a swimming athlete, was never married. From then on he used the name Achternbusch. After briefly studying at the Munich-Pasing University of Education, Achternbusch moved to the Nuremberg Art Academy in 1961. Then he also studied at the Munich Art Academy. In 1962 Achternbusch married an art teacher. In the following years he made ends meet with odd jobs. He also painted a lot. The couple initially lived in Munich, then in Starnberg, Gauting and, from 1975, in Buchendorf. Achternbusch presented his first publications in the mid-1960s: they were poems and etchings. In 1969 his first book was published under the title "Hülle".

At the beginning of the 1970s, Achternbusch's artistic interest shifted to film. He started making small films. In the 1973/74 film "Overnight in Tirol" by Volker Schlöndorff he played the role of the teacher. In 1974 Achternbusch presented the script for his first film, which was released in cinemas under the title "The Andechser Feeling". The artist made this and the subsequent films himself as a screenwriter, director, leading actor and producer. Achternbusch's films are idiosyncratic works of a high artistic level. They are based on his bizarre prose texts, which he usually has amateur actors interpret in a comical way. The director's home region is discussed in a kind of love-hate relationship with Bavaria, with autobiographical themes also playing a role. Achternbusch gained national fame as a provocative director who liked to break social taboos.

In 1977 he rejected the Petrarch Prize that was intended for him. His films were sometimes subject to censorship measures when they were broadcast on television. The then Bavarian Federal Minister of the Interior refused funding for "The Ghost" (1982). The blasphemy accusations against the film caused a scandal in the Federal Republic of Germany's film world. In addition to his films, Achternbusch also produces plays that he directs himself.