Rales graduated in 1969 from Walt Whitman High School, in Bethesda, Maryland. In 1973, he graduated from DePauw University, where he was in the Beta Theta Pi fraternity. In 1978, he was awarded a J.D. from the American University.
In 1979, he left his father's real estate firm to found Equity Group Holdings, with his brother Mitchell Rales. Using Jun K bonds, they bought a Diversified line of businesses: first Mastershield, a vinyl siding manufacturer, then Mohawk Rubber Company, then Diversified Mortgage Group. They changed the name to Diversified Mortgage Investors, in 1978, and then Danaher, in 1984.
In the 1980s, the AM side of WGMS was sold off to Washington, D.C., venture capitalists Steven and Mitchell Rales, who converted the music station into the first frequency for WTEM, a sports-talk station, in 1992.
In 1983, he married Christine Plank, a 1974 DePauw University alumna. They have three children, Alexander, Gregory, and Stephanie. They divorced in 2003. In 2012, he married Lalage Damerell.
He has served as Chairman of the Board of Danaher since January, 1984.
In 1985, they bought Easco Corporation, the then-largest independent aluminum extrusion manufacturer, and hand tool manufacturer which produced the Craftsman brand of sockets and wrenches for Sears.
In 1988, they made a hostile takeover bid for Interco (including Converse, and Ethan Allen). When the company responded with a poison pill, they sued, and prevailed in court. They later ended the bid after five months with a profit of $60 million.
In 1995 Steven and Mitchell Rales founded Colfax Corporation, a Richmond, Virginia industrial pumps manufacturer. In May 2008, Steven engineered the initial public offering of the company.
He has been a major supporter of the Washington Ballet. In 2002, he was a major donor in the dedication of the Peeler Art Center at DePauw University. He was a donor to GolfRocks.
Rales owns the production company Indian Paintbrush, which has funded The Darjeeling Limited (2007), and Fantastic Mr. Fox (2009).
The company was also involved in Jeff, Who Lives at Home (2011), Moonrise Kingdom (2012), Seeking a Friend for the End of the World (2012), Labor Day (2013), The Grand Budapest Hotel (2014), and Me and Earl and the Dying Girl (2015), and Isle of Dogs (2018).