He hailed from Dongwu 東武 (modern Zhucheng 諸城, Shandong) and was a fellow student of Kuang Heng 匡衡 and Ban Bo 班伯. Passing the examination at the National University (taixue 太學), he was appointed court gentleman (lang 郞) and was for some time also erudite (boshi 博士).
During the reign of Emperor Cheng 漢成帝 (r. 33-7 BCE), he was appointed Grand Mentor (taifu 太傅) to the Prince of Dongping 東平. He was recommended by the Counsellor-in-chief (chengxiang 丞相), Zhai Fangjin 翟方進, and the Censor-in-chief (yushi dafu 御史大夫), Kong Guang 孔光, and was therefore promoted to Grand master of splendid happiness (guanglu dafu 光祿大夫) and Vice Counsellor (chengxiang sizhi 丞相司直).
In 17 BCE, a large inundation threatened the people of Bohai 渤海, Qinghe 清河 and Xindu 信都. Urging the emperor to bring relief, Shi Dan was dispatched to the region to take over the task of reconstruction and nourishing the population. In 14 BCE he was appointed Chamberlain for the palace revenues (shaofu 少府), in 8 BCE Chamberlain for attendants (guanglu xun 光祿勳), palace attendant (shizhong 侍中), and Grand Mentor of the Heir Apparent (taizi taifu 太子太傅). A year later he was made General to the Left (zuo jiangjun 左將軍) and was granted the title of Marquis within the passes (guanneihou 關內侯). Shortly after, he was made Director of the Imperial Secretariat (shangshu ling 尚書令).
When Wang Mang 王莽 became regent, Shi Dan was made Minister of war (da sima 大司馬), then Grand Minister of Works (dasikong 大司空), and was made Marquis of Gaole 高樂侯. He regularly remonstrated to Emperor Ping 漢平帝 (r. 1 BCE-5 CE) against the growing power of Wang Mang and recommended restricting the size of privately owned land and of private slaves, yet the families of the empresses Ding 丁太后 and Fu 傅太后 obstructed any attempts in this direction. The two families thereupon conspired against him and managed to have him dismissed and deprived of his title of nobility.
In 2 CE, he was again made Marquis within the passes, and a year later Marquis of Yiyang 義陽侯. Shi Dan died shortly after. His posthumous title is Marquis Jie 節侯.