He is the only son of a Lutheran minister who became a prison warden in New York; their last name is pronounced "Stee-fell" and is German for "boot."

He is an avid motorcyclist. He grew up riding dirt bikes, currently owns a Harley-Davidson Wide Glide and once drove 5600 kilometres across the north-eastern US with ballerina Gillian Murphy riding pillion. He is also a Green Bay Packers fan.[citation needed]

Stiefel began ballet training in Madison, Wisconsin at the Monona Academy of Dance at age eight. He became involved with classical dance through his older sister, who was taking a class. The teacher was interested in getting Ethan to take class because boys in ballet are a rarity. He studied for two years at the Milwaukee Ballet School under Judith Warren and at the Central Pennsylvania Youth Ballet before moving to New York City to attend ABT's School of Classical Ballet and School of American Ballet on scholarship.

While there, Stanley Williams enrolled him in the company's men's special class where he trained alongside Rudolf Nureyev, Mikhail Baryshnikov and Fernando Bujones. In 1992, he took a leave of absence to perform with the Zürich Ballet and returned to the NYC Ballet company one year later as a soloist. By 1995, he was a principal dancer with the company. He ended his tenure with the NYC Ballet in April 1997 when he joined ABT as a principal dancer, where he remains today. He danced with the short-lived Mikhail Baryshnikov School of Classical Ballet at ABT. His dance repertoire includes many key romantic roles in both classical and contemporary ballet.

He won a silver medal at the Prix de Lausanne in 1989 and also received a Princess Grace Foundation-USA grant in 1991. In 1998, Stiefel was nominated for the Benois de la Danse Award as one of the rising stars in ballet.

In 2007, Stiefel made his debut with the Australian Ballet in Nureyev's staging of Don Quixote, for its Melbourne and Sydney seasons, in the role of Basilio.

In 2004, he created a four-week workshop, Stiefel & Students (originally called Stiefel & Stars), for aspiring dancers where dance students train and perform with professional ballet dancers. It is held annually on Martha's Vineyard in the month of August. The program accepts students aged 12 to 18. Its rollcall of star guest teachers include Stiefel, Johan Kobborg, Amanda McKerrow, Elizabeth Parkinson, Scott Wise, Marcelo Gomes, John Gardner, Gary Chryst, Ann Reinking, and Alina Cojocaru. The program has been on hiatus since 2008.

In late 2005, Ballet Pacifica, based in Irvine, California, named him as its artistic director with the aim to relaunch itself as a higher-profile ballet company. In conjunction, Stiefel announced elaborate plans for tours, a larger permanent ensemble of experienced dancers, a longer season and Christmas performances of George Balanchine's "The Nutcracker" at the Orange County Performing Arts Center. However, after the company failed to raise the USD$6.5 million necessary to realize Stiefel's plans, its executive director resigned followed by Stiefel himself in April 2006.

He is currently the dean of the School of Dance at the North Carolina School of the Arts in Winston-Salem and frequently teaches classes.

In 2000, he starred in the film Center Stage, directed by Nicholas Hytner with original choreography by Susan Stroman. He also starred in the 2008 sequel Center Stage: Turn It Up. Center Stage features a subplot in which Stiefel's character garners the financial support of a flirtatious female philanthropist (played by Elizabeth Hubbard). A New York Times article entitled "How Much Is That Dancer in the Program?" revealed that Stiefel has a similar real-life sponsorship relationship with wealthy philanthropist Anka Palitz.